AI transcript
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0:00:35 Today’s number 55.
0:00:39 That’s the percentage of toy buyers who are adults shopping for themselves.
0:00:40 True story yet.
0:00:45 I decided to make a porno in the vintage or in the genre of the movie Toy Story.
0:01:01 I call it You’ve Got a Friend in Me.
0:01:02 Welcome to Propting Markets.
0:01:08 Today’s episode is presented by Fundrise, and we’re discussing Stargate and MyStake
0:01:11 and La Equidad, the football team in Colombia.
0:01:13 But first, Ed, what is the good word?
0:01:14 What’s going on?
0:01:15 The banter?
0:01:18 Well, I think the more relevant question is what is going on with you because you just
0:01:22 came off of one of the most popular podcasts in the world, right?
0:01:23 I was on smart lists.
0:01:24 I’m still buzzing.
0:01:25 I’m still kind of nervous.
0:01:26 I was actually nervous.
0:01:28 I really wanted to impress those guys.
0:01:29 Yeah, I can tell.
0:01:30 I like Will Arnett.
0:01:31 He’s very handsome.
0:01:35 Jason Bateman is very serious, and I think Shanae’s is very talented, so they’re kind
0:01:36 of the trifecta.
0:01:37 How did it go?
0:01:38 What did you talk about?
0:01:39 I know it wasn’t a disaster.
0:01:40 What I was worried about is they do a reveal.
0:01:41 Have you listened to it?
0:01:47 Everyone’s responsible for a guest, and they describe them, and then they do the reveal.
0:01:49 I felt like I was Will’s guest.
0:01:52 Were you on the taping for the introduction?
0:01:54 Can you hear him revealing it?
0:01:55 Yeah, you’re there.
0:01:56 You do a reveal.
0:01:59 I took my hood off, like, “Oh, look who it is.”
0:02:00 They’re all like, “Oh.”
0:02:06 I thought literally, Will had showed up to a party with a bag of unshelled peanuts.
0:02:09 I’m like, “Everyone’s going to be pretend it’s nice.
0:02:10 Oh, that’s great.”
0:02:14 I guess the most important question, did Jason Bateman and Shaun Hayes know who you
0:02:15 are?
0:02:17 Jason Bateman guessed who I was.
0:02:18 Oh, really?
0:02:22 Will Arnett said a professor, and Jason went, “Propji.”
0:02:23 Wow.
0:02:28 And Sean also guessed before the end was because he knows he’s good friends with Kara Swisher,
0:02:29 so he had heard her.
0:02:30 Okay.
0:02:31 Well, look at that.
0:02:32 You’re moving up in the world.
0:02:33 A hundred percent.
0:02:37 I was just asked to be a founding member of one of those Tony members clubs.
0:02:39 I’m not going to say which one, because I’ll revoke my membership.
0:02:43 I literally, I sent it to everyone I know, and I’m like, “I am so big-time now.
0:02:48 I’m a founding member of one of these very exclusionary rejectionist douchebag clubs,
0:02:50 so it’s been a really good week.”
0:02:53 It sounds like a great week, but it means you’re going to have to make me a member.
0:02:55 That’s what I’m going to be bugging you about now.
0:02:56 Yeah.
0:02:57 I’ve decided.
0:03:00 The reason I don’t party with you guys or hang out with you socially is you have this
0:03:04 image of me, and I don’t need you to see me drunk.
0:03:05 I’ve seen you drunk.
0:03:06 I know what you’re like.
0:03:07 I don’t think I’ve ever been drunk around you.
0:03:08 Have I?
0:03:09 I’ve seen you drunk.
0:03:13 I think I saw you drunk, and I’m pretty sure you were drunk in Miami.
0:03:18 When you handed us a black card and was like, “Go, buy a bunch of champagne and get a table,”
0:03:20 you must have been at least a little bit buzzed.
0:03:21 I don’t remember it.
0:03:23 I don’t think my opinion of you would change that much.
0:03:24 I think you’re too frightened of this.
0:03:28 I think it’s impossible not to judge people by the way they behave drunk.
0:03:32 By the way, I’m absolutely a better version of me, a little bit fucked up.
0:03:33 I’m nicer.
0:03:34 You should want me to see it.
0:03:35 I’m more engaged.
0:03:36 I’m friendlier.
0:03:37 Right.
0:03:38 I’d love that.
0:03:39 What do you like drunk at?
0:03:42 I think there’s more people out there that are more interested in what you’re like when
0:03:45 you’re drunk, because you come across as so together and so buttoned up.
0:03:50 I think I’m very similar to you that I’m a lot more friendly.
0:03:51 I think I laugh a lot more.
0:03:55 I find other people funnier and more interesting when I’m drunk.
0:03:57 I think that’s the best thing about it actually.
0:04:03 It’s like I’m suddenly so excited by other people and what they have to say.
0:04:07 There’s a term that describes what you’re laying out, it’s called alcoholism.
0:04:09 All right, enough of that shit.
0:04:10 Stop drinking, get on with the headlines.
0:04:19 Let’s start with our weekly review of market vitals.
0:04:24 The S&P 500 climbed, the dollar slipped, Bitcoin was volatile, and the yield on 10-year
0:04:27 treasuries increased, shifting to the headlines.
0:04:33 Netflix added a record 19 million new subscribers in the fourth quarter, that’s up 44% from
0:04:34 a year earlier.
0:04:38 The company also beat expectations on the top and bottom lines, and announced price
0:04:45 hikes on all three U.S. plans, shares rose more than 14% to an all-time high.
0:04:50 Johnson & Johnson sales rose more than 5% year-over-year to hit $22.5 billion in the
0:04:55 fourth quarter, beating expectations, however lower than expected guidance and slower medical
0:04:58 device sales sent the stock down nearly 2%.
0:05:04 And finally, Jimmy Donaldson, also known as MrBeast, has expressed interest in buying
0:05:05 TikTok.
0:05:08 He joins a growing list of investors looking to make a bid for the app.
0:05:13 Scott, your thoughts starting with this really good quarter from Netflix.
0:05:14 Extraordinary.
0:05:19 Ted Sarandos, he has a co-CEO, his name escapes me, they’re arguably, I don’t want to call
0:05:25 them underrated, but the most least discussed, God, I’m shocked that Trump didn’t threaten
0:05:28 them with jail unless they came to the inauguration.
0:05:30 These guys are just so good.
0:05:35 There’s all of streaming, and there’s Netflix, and Netflix is worth more.
0:05:39 If its subscribers were a country, 300 million people would be the fourth largest in the
0:05:45 world in terms of population behind the U.S. and ahead of Indonesia.
0:05:51 Its full year operating margin increased 6% and net profits popped 60% year-on-year.
0:05:55 And they’re raising prices, they’ve doubled prices in the last 10 years versus inflation
0:06:00 at 33%, which is going to give them more margin and even more money to spend on more content.
0:06:03 So this company is just dominant.
0:06:04 What are your thoughts?
0:06:07 I think the most interesting thing are the price hikes you mentioned.
0:06:11 I mean, you said prices have doubled in the last 10 years.
0:06:14 That’s actually just the premium subscription that has doubled.
0:06:20 So a premium subscription now costs $25 a month, double where it was around 10 years
0:06:21 ago.
0:06:24 It’s risen faster than, of course, faster than inflation, faster than any of the other
0:06:27 pricing plans Netflix offers.
0:06:31 But to me where it gets really interesting is when we look at the difference between
0:06:37 the price of a premium subscription with Netflix and a standard subscription.
0:06:40 Because that difference has ballooned recently.
0:06:45 So 10 years ago, the difference between the most expensive and the cheapest option on
0:06:47 Netflix was only $5.
0:06:49 Today it’s a difference of $17.
0:06:52 So the Delta has more than three Xs.
0:06:57 And to me, this is a prime example of what you have pointed to in the past, which is
0:07:02 I think what I would call inequality pricing, where you have this growing disparity between
0:07:03 the rich and the poor in America.
0:07:09 And it’s now being reflected in the pricing strategies of even our most basic products
0:07:10 like Netflix.
0:07:15 I mean, we used to see this a lot in air travel or in events, but we’re now seeing it in very
0:07:18 standard consumer categories like streaming.
0:07:23 So it feels like this tiered pricing strategy is basically becoming ubiquitous.
0:07:28 It’s like we increasingly have products for poor people and products for rich people.
0:07:30 And that applies to streaming.
0:07:34 It applies to dating apps, which we’ve talked about, even clothes and even food.
0:07:39 There are very few instances today, it feels like, where a rich person and a poor person
0:07:40 are buying the same thing.
0:07:46 Yeah, but Netflix is trying to have it both ways in the sense that there’s usually Android
0:07:47 and iOS.
0:07:52 iOS is a phone that costs three times the monthly salary of a Hungarian citizen, and
0:07:55 Android is essentially free with a phone contract.
0:07:57 And the world has kind of gone iOS and Android across most categories.
0:08:00 It’s Tiffany or Walmart, right?
0:08:02 It’s Emirates Airlines or Southwest.
0:08:07 In the case of Netflix, they said, I mean, that appetite, their appetite is so voracious.
0:08:08 Oh, they’ll never do original programming.
0:08:11 They just do CDs or DVDs of other movies now.
0:08:14 They go into original programming with House of Cards.
0:08:17 Oh, they’ll never do live events.
0:08:20 Some of the biggest live events ever streamed, right?
0:08:23 They’re absolutely going to go into news.
0:08:24 They will never go into advertising.
0:08:28 Well, now they have an ad-supported tier, and I believe 55% of their new signups are from
0:08:32 the ad tier, which I was very skeptical on, and I was wrong.
0:08:34 So they’re basically segmenting the market.
0:08:36 Well, who could afford $25 a month?
0:08:38 I mean, that’s only for the top, top, top.
0:08:39 That’s right.
0:08:41 But still a lot of people are going to pay that.
0:08:49 So they’ve basically said, I mean, they’re going after all of media.
0:08:54 I wouldn’t be surprised if at some point they have a music offering.
0:08:55 They’re looking at everything.
0:09:00 But broadcast television used to be, well, I always have sports, right?
0:09:03 Because we’re the only ones that can aggregate this large an audience for advertisers so
0:09:06 we can pay the NFL or the MLB more.
0:09:12 And basically Amazon and now Netflix have said, nope, we’re going to go into live sports.
0:09:16 And then they said, well, we’ll always have ad-supported television for old people who
0:09:19 don’t want to spend the money for premium content.
0:09:22 Nope, we’re going to give them an ad tier.
0:09:28 So Netflix is essentially coming for everyone’s lunch in traditional broadcast media, and
0:09:30 they’re winning.
0:09:34 This isn’t one of those earnings calls where a chip company reports a great quarter and
0:09:38 all the peer group goes up in sympathy.
0:09:40 This is getting to the point where it’s a zero-sum game.
0:09:42 I don’t think people are spending more money on streaming.
0:09:50 And for them to add this many consumers and to have this pricing power, I’d hate to be
0:09:52 the Ellison kid right now.
0:09:56 I just don’t think, I mean, granted, I’d like to be a billionaire son, maybe I wouldn’t
0:09:58 hate to be him.
0:10:03 But these guys are growing so fast, they’re running away with it, there’s no way they aren’t
0:10:05 sucking the oxygen out of the room for the other players.
0:10:06 Yeah.
0:10:13 Let’s move on to Johnson and Johnson, $23 billion in revenue, up 5% from last year.
0:10:18 I’d like to just quickly compare this to United Health and their earnings, which we discussed
0:10:19 last week.
0:10:24 So on the United Health earnings call, the tone as we discussed was quite somber.
0:10:28 They addressed this Brian Thompson shooting, and then they went into this discussion about
0:10:30 the high cost of healthcare in America.
0:10:35 And they argued, whether we believe them or not, that actually these high costs are not
0:10:36 their fault.
0:10:41 It’s not the insurance companies, it’s the fault of the drug manufacturers.
0:10:46 So companies like Merck, companies like Pfizer, and yes, Johnson and Johnson.
0:10:51 So I went into this earnings call from Johnson and Johnson, expecting them to address this.
0:10:57 Not necessarily the shooting, but at least the healthcare industry overall, maybe some
0:10:59 of the conversations that are happening around it.
0:11:05 There was not one word on this earnings call about the cost of healthcare in America.
0:11:09 They talked about margins, they talked about taxes, foreign exchange, et cetera, but nothing
0:11:10 on costs.
0:11:15 And what that leads me to believe is that Johnson and Johnson doesn’t think that they need to
0:11:16 address this.
0:11:23 They probably think, probably correctly, that the public, well, they’re not blaming us,
0:11:26 they’re blaming the insurance companies, they all hate United Health.
0:11:30 So let’s not touch this.
0:11:34 I guess I just find this upsetting, and I have some data that I can point to, but first
0:11:38 I just, let’s just get your reaction to my thoughts here.
0:11:42 Shouldn’t Johnson and Johnson at least be touching this?
0:11:43 Should they yes?
0:11:45 Would it have been smart for shareholders?
0:11:46 No.
0:11:47 And I’m sure what they’ve done is the following.
0:11:51 They’ve had every crisis expert in the world coach them, and then they went out and did
0:11:56 some testing across messaging, and they found that the easiest thing to do, they probably
0:12:01 found that the majority of consumers don’t immediately affiliate them with what is taking
0:12:03 place in healthcare.
0:12:08 So the ultimate strategy they came away with was, don’t get near it.
0:12:12 Because it’s like when Lyndon Johnson said, they said, well, he’s not guilty of that.
0:12:16 And it was like, well, make him deny it, accuse him of it and make him deny it.
0:12:20 I think even bringing it up, they decided that even bringing it up or addressing it head
0:12:26 on was just going to raise it as an issue amongst a bunch of people who hadn’t connected
0:12:28 them with the issue yet.
0:12:34 Now we’ll see people, look, I think for the most part, the analysts on the call in the
0:12:37 investor public wants to know what they’re doing around shareholder value.
0:12:38 Yeah, exactly.
0:12:45 But I’m obviously going to do my job as the media guy to address it and put them in the
0:12:46 conversation.
0:12:47 You mean as the whiny millennia?
0:12:48 Yeah, exactly.
0:12:50 The whiny Gen Z guy.
0:12:51 Oh, Gen Z.
0:12:52 That’s who you are, sir.
0:12:53 Yeah, exactly.
0:12:55 Don’t mislabel me.
0:13:01 I just want to point out that the reality is that these companies like Johnson & Johnson
0:13:05 are just as much to blame for health care costs as anyone else.
0:13:09 And there’s this stat that I find quite interesting.
0:13:14 Of all of the verticals in the health care sector, the vertical with the highest margins
0:13:17 by far is pharmaceutical manufacturing.
0:13:23 They deliver on average profit margins of 26%.
0:13:28 You compare that to the insurance companies, it’s only 3%.
0:13:34 So if there’s anyone who’s extracting this value out of the health care industry and
0:13:39 perhaps too much more than they deserve, I think you could make the argument that it’s
0:13:43 Johnson & Johnson and the other pharmaceutical manufacturers.
0:13:47 So I think my takeaway here is if we’re going to have this criticism of the health care
0:13:52 industry, if we’re going to engage in that conversation, we have to make the manufacturer
0:13:53 is part of that conversation.
0:13:57 We have to talk about Merck, we have to talk about Pfizer, we have to talk about Abbey,
0:13:59 we have to talk about Johnson & Johnson.
0:14:06 We could talk about United Health too, but that’s just, that’s not the whole story.
0:14:11 There are other people whose feet we should be holding to the fire and the fact that Johnson
0:14:16 & Johnson believes that they can release earnings without even addressing this, without
0:14:17 even mentioning it.
0:14:23 To me, that’s a big problem and to me, that shows that the discourse is not fully informed
0:14:24 yet.
0:14:27 I think you’re being heavy-handed with the wrong people and that is there’s always this
0:14:32 trope or there’s always this zeitgeist or expectation that CEOs need to be more thoughtful
0:14:34 about society.
0:14:40 In my 30 years of being in the business world and following CEOs and launching red phones
0:14:45 from Bono and talking about stakeholders versus shareholders, I find all CEOs generally speaking
0:14:49 are totally focused on getting a home in the Hamptons by getting the stock price up, full
0:14:53 stop, full stop, almost nothing else.
0:14:58 They’ll give some verbiage to the climate or water or making women feel better about
0:15:03 themselves, whatever it is, at the end of the day, 99% of their human capital in that
0:15:06 position is going to getting the share price up.
0:15:07 I think who has failed here-
0:15:08 It regulates us now.
0:15:14 Well, is the U.S. who has failed to elect people who will stand up to the pharmaceutical
0:15:20 lobby and say, “Look, elected representative, if you don’t vote for this bill that’s going
0:15:26 to give us Medicaid the ability to buy drugs from Canada or negotiate with pharmaceutical
0:15:30 companies directly, I’m going to boot you out of office because I’m paying double for
0:15:33 my healthcare what they are in Canada.”
0:15:39 I think it’s on us to elect people that for some reason have let these companies, despite
0:15:45 the fact these drugs are discovered and manufactured and distributed in the U.S., that we pay more
0:15:46 for them.
0:15:47 Why?
0:15:52 Because these companies give lawmakers money who then pass laws that give them unearned
0:15:55 margin that raises the prices on Americans.
0:15:57 Again, I go back to the same thing.
0:15:58 They’re doing their job.
0:15:59 That’s what they do.
0:16:00 That’s what they will always do.
0:16:02 It’s us that’s not doing our job.
0:16:03 I totally agree with that.
0:16:04 I just want to be clear.
0:16:07 I’m not blaming the CEOs for that.
0:16:12 What I’m doing is I’m bringing attention to the fact that this is happening such that
0:16:17 eventually, as you say, we start holding our elected representatives accountable and we
0:16:20 start getting proper regulation to help ourselves.
0:16:25 But I think to get to that point, we need to understand the issues a little bit more.
0:16:32 We need to know who is screwing us over and then we need to be loud and aggressive about
0:16:37 addressing that with our elected representatives and to make sure that regulations actually
0:16:38 protect us.
0:16:41 But let’s just finish off these headlines here.
0:16:44 MrBeast is making a bid to buy TikTok.
0:16:48 He’s one of many groups bidding.
0:16:54 We also have Kevin O’Leary, the Shark Tank guy who’s joining up with Frank McCourt, who’s
0:16:58 the former owner of the LA Dodgers, they’re making a bid.
0:17:03 We’ve also seen Perplexity, the AI startup, talking about making an offer.
0:17:07 We’ve seen kick this live streaming platform that has also expressed interest.
0:17:11 And then of course, there are the suggestions we heard from Donald Trump last week.
0:17:14 He said he’d be open to Elon Musk buying TikTok.
0:17:18 I don’t think Elon Musk has said anything himself about that interest, but there are
0:17:19 rumors.
0:17:24 And he’s also said he’d be open to Larry Ellison, the founder of Oracle buying TikTok.
0:17:28 Lot of people on this list, a lot of rumors kind of swirling around.
0:17:32 Do you have any predictions, Scott, on who is going to end up owning this thing?
0:17:37 I think there’s so many moving parts here, it’s difficult to predict, but the three criteria
0:17:39 are the following, capital.
0:17:42 That takes MrBeast and MrWonderful.
0:17:47 They just don’t have the capital and they’re just saying, look at me right now.
0:17:49 It’s a way to get your name in the headlines.
0:17:54 I would say that’s like 0.1% chance they’re going to be involved in a deal.
0:17:56 You need massive capital.
0:18:01 You also need massive compute because it’s not like you can spin up that type of compute
0:18:04 to handle that type of app overnight.
0:18:09 And more than anything is the third C or the third and the fourth, you need the CCP.
0:18:14 I just think the Chinese Communist Party is going to decide who gets this or who doesn’t.
0:18:16 And so who kind of fits those criteria?
0:18:18 One, it might be nobody at all.
0:18:24 It might be, all right, the US claim passed a law with 80 senators, 79 senators signed
0:18:28 into law, and then they blinked when the deadline came.
0:18:29 They had six months.
0:18:33 Now I just don’t see why they would feel any sense of urgency to do anything.
0:18:34 It’s 20% of the revenue.
0:18:38 They might just say to the good folks at ByteDance, sorry that we’re not putting up with this.
0:18:42 You’re going to have to grow the stakeholder value in other nations.
0:18:44 We’re not acquiescing to this bullshit.
0:18:45 We don’t want to set this precedent.
0:18:48 If they do a deal, it’s going to be sold to someone who they think they have leverage
0:18:50 over.
0:18:57 Capital compute and CCP leverage, that kind of adds up to sort of what I call an Ellison
0:19:05 Musk-Microsoft kind of triopoly because people will say, oh, he’s just Elon being Elon.
0:19:06 He’s got Asperger’s.
0:19:09 He says things he shouldn’t, but that’s part of his genius.
0:19:12 You can’t have a genius like that who doesn’t make these errant mistakes.
0:19:13 That’s the beauty of him.
0:19:14 He’s so raw.
0:19:15 Guess what?
0:19:19 When’s the last time you heard him say anything offensive about China?
0:19:21 He doesn’t.
0:19:26 He seems to have remarkable maturity and self-control around China.
0:19:30 In Brazil, stuck up the middle finger to him and said, no, we’re passing this on, we’re
0:19:32 kicking your ass out unless you do the following things.
0:19:35 All of a sudden, he’s gone quiet on Brazil.
0:19:38 He is very capable of acquiescing.
0:19:44 He’s a big free speech advocate until he’s doing Twitter in Turkey and Erdogan says,
0:19:45 no, that won’t hunt here.
0:19:46 He says, no problem.
0:19:47 No problem.
0:19:50 We’ll censor like fucking crazy here.
0:19:56 Given that he has factories and a lot of business in China, I think that CCP probably
0:19:58 looks at him and says, that’s our boy.
0:20:03 We have leverage over this guy and then Trump is going to get some optics around picking
0:20:09 his buddies, his conservative buddies, which is again, see above kleptocracy, but I think
0:20:15 the good money is on one of two things, nothing, the deal doesn’t get done or it’s done based
0:20:21 on what the CCP sees as still them still having leverage over whoever, whoever quote
0:20:25 unquote owns this platform or rents it or leases it.
0:20:29 This is going to be a, if this deal happens, it’s going to be a pretzel deal where the
0:20:34 administration tries to take credit for the deal and people try to pretend it’s, the CCP
0:20:35 isn’t still involved.
0:20:37 I just think this is going to be a Frankenstein.
0:20:38 Yeah.
0:20:42 It does also feel that Larry Ellison seemed like Larry Ellison could be a really good
0:20:43 pick.
0:20:45 I mean, he does a lot of business with China through Oracle.
0:20:50 Oracle also has that relationship with TikTok where they handle all of the security in Texas
0:20:56 and he, unlike Mr. Wonderful and Mr. Beast, is a mega, mega, mega billionaire.
0:21:00 So it does feel like, and by the way, he’s newly kind of friends with Trump as we’ll
0:21:02 get to in a moment.
0:21:04 So he does seem like a good pick.
0:21:09 Just one side note, wouldn’t it be just so fucking awful if Elon Musk owns TikTok?
0:21:15 I don’t want to go down this rabbit hole, but like, God, it’s just going to be a shitstorm
0:21:17 in the news about Elon again.
0:21:22 I mean, first it was Twitter and now if he would own an even bigger platform that has
0:21:27 even more power and influence, God, I just think it’s going to be really terrible for
0:21:28 anyone who listens to the news.
0:21:29 I don’t know.
0:21:34 I think a guy who makes faux Nazi salutes, I’m not worried about that.
0:21:36 It would be the worst outcome possible.
0:21:40 I think of all the outcomes, at least from my perspective, it would be the worst one.
0:21:41 Yeah.
0:21:46 The idea of him having more power and also controlling what goes through the neural jack
0:21:52 into our use head, yeah, I don’t, I agree with you that it’s not a pleasant thought.
0:21:54 We’ll be right back after the break with a look at Project Stargate.
0:21:59 If you’re enjoying the show so far and you haven’t subscribed, be sure to give Prof.
0:22:09 G. Markets a follow wherever you get your podcasts.
0:22:11 Support for the show comes from the Funrise Innovation Fund.
0:22:15 The investing world seems to be vending towards democratization, but venture capital always
0:22:18 felt like it may be one of the last ivory towers to fall.
0:22:22 It requires a lot of capital, the right relationships, et cetera, et cetera.
0:22:27 That’s probably why when the Funrise Innovation Fund launched promising to democratize venture
0:22:29 capital, there was a lot of skepticism.
0:22:33 But the progress they’ve made in a few years is hard to argue with the innovation fund has
0:22:39 now built a $150 million portfolio of some of the most highly sought after private tech
0:22:40 companies in the world.
0:22:45 Their minimum investment is just $10, which is virtually unheard of for venture capital.
0:22:49 Look, even the best venture funds should be categorized as high risk investments.
0:22:53 Venture investing is not, for everyone, see above, high risk.
0:22:57 But at a minimum, you can visit fundrise.com/profg to check out the innovation funds portfolio
0:22:59 for yourself.
0:23:04 Visit fundrise.com/profg to check out the innovation funds portfolio and start investing today.
0:23:08 Relevant disclaimers can be found at the end of the show and at fundrise.com/innovation.
0:23:19 We’re back with ProfG Markets.
0:23:25 OpenAI, Oracle, and SoftBank are teaming up to invest as much as $500 billion to build
0:23:27 data centers in the US.
0:23:31 This will all be under a new venture called Stargate.
0:23:36 Trump announced the venture while Sam Altman, Larry Ellison, and Masayoshi Son stood behind
0:23:37 him.
0:23:43 The US data center, operated by Oracle and utilized by OpenAI, will be located in Texas.
0:23:45 Scott, huge move here.
0:23:49 They say they’re going to immediately deploy $100 billion.
0:23:54 It will amount to half a trillion over the next four years or so.
0:23:56 Any initial reactions to Stargate?
0:23:57 It’s brilliant branding.
0:24:01 Basically, the Trump administration took a bunch of efforts that were already underway
0:24:05 and then pretended that he owned it and it was his idea and branded it.
0:24:07 I don’t believe the government is putting any money into it.
0:24:08 They’re not.
0:24:12 This is an initiative that was already half-baked under the Biden administration, but the Biden
0:24:15 administration decided not to brand it or announce it.
0:24:20 Trump stepped in and said, “Stargate, it’s brilliant on the part of the administration.
0:24:25 I have no idea what the fuck Masayoshi Son is doing in this.”
0:24:28 Masayoshi Son is the luckiest investor in the world.
0:24:34 I think he invested $20 million in Alibaba and it ended up being worth $50 billion.
0:24:36 It’s the greatest venture investment in history since then.
0:24:38 He sold NVIDIA in 2019.
0:24:39 Yeah.
0:24:42 Since then, he’s been arguably the worst investor in the world.
0:24:47 My theory is that he’s actually a CAO officer who’s been charged with repatriating a ton
0:24:56 of cash out of the Gulf back to American entrepreneurs, that he’s a Korean-born Japanese national
0:25:02 that has figured out a way to extract all the margin from Gulf oil wealth and get it
0:25:03 back to Western democracies.
0:25:05 Anyways, that’s my theory.
0:25:06 That’s what I’m going with.
0:25:07 That’s a pretty good skill.
0:25:08 I’d like to be good at that.
0:25:09 Right?
0:25:11 It’s like an episode of “Homeland,” but I don’t know what he’s doing in this.
0:25:18 The thing that’s really interesting about it is that I think that for the first time,
0:25:25 really, this solidifies Oracle’s seat at the big boy’s table, at the adult table, because
0:25:31 NVIDIA is involved in here, open AI is involved in here, and there’s Gulf money, I think they’re
0:25:34 called MGX or something.
0:25:38 The two big winners here are Trump, who got to brand it and got a freebie.
0:25:39 He got to take credit for it.
0:25:43 He’s like that marathon runner who showed up in mile 26 and then ran through the tape
0:25:48 and pretended that she had won it, and also Larry Ellison and Oracle.
0:25:53 I think Oracle being at this seat makes them look really good.
0:25:58 I think this brought him up to fourth richest person in the world, so he’s definitely happy.
0:26:02 Just to go over the basic structure here, because it is a little bit confusing what
0:26:05 actually is this thing, Stargate.
0:26:10 According to OpenAI, this will be a new company, and the owners of this company, either people
0:26:18 who actually hold equity, they are OpenAI, Oracle, this company, MGX, which is this investment
0:26:24 firm owned by the United Arab Emirates, and SoftBank.
0:26:26 That explains why Master Sin is there.
0:26:29 These SoftBank are going to be putting up the money here.
0:26:32 Now, they’ve also announced a list of their technology partners.
0:26:38 These people or these companies won’t necessarily be investing directly into the venture itself,
0:26:43 but they will be employing them, and they’ll be building out these contracts to build these
0:26:51 data centers, and those include Oracle, NVIDIA, ARM, and Microsoft.
0:26:56 This is a huge coalition of companies.
0:27:01 Most of the big AI companies are on this list, which I think is why it’s quite interesting
0:27:08 to look at who isn’t on this list, and I think the big names that come to mind here who didn’t
0:27:15 make the cut, they are Google, Amazon, Meta, and Thropic, and I think we’ve got to mention
0:27:20 Elon Musk in some way, so Elon Musk’s company, XAI.
0:27:26 First off, why do you think those companies weren’t led into the club here, or more importantly,
0:27:30 who do you think decided that these companies weren’t going to be led into the club?
0:27:32 Was this Sam Altman behind this?
0:27:36 Was it Masayoshi San, Larry Ellison, maybe even Donald Trump?
0:27:40 I have no idea, but maybe you could speculate.
0:27:41 I don’t think it was Trump.
0:27:46 This is how club deals come together, and that is a private equity, someone with a vision
0:27:49 for this thing calls their buddy at … It might have been Sam Altman.
0:27:53 If I had to guess, I would say it was probably Sam Altman who said, “All right, I need to
0:27:55 bulk up fast.
0:27:56 I like the guy.
0:27:57 Jensen and I get along.
0:27:58 We have a shared vision.
0:28:00 I’m buying a ton of his chips.
0:28:01 We get along.”
0:28:07 Then he called Larry Ellison, and they sort of said, “Okay,” and Larry said, “Fine, but
0:28:09 I don’t want Microsoft in the deal.
0:28:10 Are they going to be in the deal?
0:28:14 Because I see them as my competitor now,” and they said, “No,” and you form a consortium
0:28:16 in a club.
0:28:21 What will likely happen is this will inspire another consortium that consists of the players
0:28:23 you mentioned who aren’t in this group.
0:28:26 This stuff is more informal than you might think.
0:28:28 One person has a vision and calls.
0:28:33 Sam Altman can get anyone on the line right away, and he can say, “I have a vision for
0:28:34 something.
0:28:35 This is going to require a lot of capital.
0:28:36 I’m going to need partners.
0:28:37 This is the vision.
0:28:38 This is the role you would play.
0:28:39 Are you interested?”
0:28:45 NVIDIA says, “Yeah, I’m interested, but you can’t have another chipmaker,” and somehow
0:28:48 Masayoshi Assange showed up, and they called him, and he said, “I can get a bunch of money
0:28:49 out of the golf.”
0:28:50 I don’t know.
0:28:55 They all supposedly bring something, but these deals are more based on relationships,
0:28:57 and then they figure out the strategy.
0:29:02 These are very smart people, but I imagine this didn’t happen in the last five or seven
0:29:03 days.
0:29:05 This has been being baked for probably six months, but the reason why I think it was
0:29:10 Altman was I remember him saying, “I need to raise a trillion dollars to build a compute
0:29:16 that’s going to be required for AI,” and everyone was like, “Whoa, a trillion dollars.”
0:29:19 He was seriously saying, he was the first person, the first entrepreneur to say, “I
0:29:23 need to raise a trillion dollars to do this,” and this is saying 100 billion to get started,
0:29:27 500 billion down the road, but my guess is they all know each other.
0:29:28 They like each other.
0:29:33 There’s a strategic fit, mostly with all of these players, but it’s relationships.
0:29:35 It’s people calling each other and saying, “I have an idea.”
0:29:36 Yeah.
0:29:38 The relationships that are forming are so interesting.
0:29:43 I’ve talked before about how I believe that Big Tech is collaborating to create this monopoly
0:29:47 in AI because all of these companies, they’re investing in each other’s AI companies, and
0:29:51 it’s all turning into this one mega company.
0:29:55 With this project, though, I am starting to see it a little differently.
0:30:01 More as you say, it feels like there’s a consortium developing, and that’s one team,
0:30:06 and I think we could probably call it the open AI team, and then there’s the other guys.
0:30:12 I think it would be fair to call that the Anthropic team because what you have now, you’ve
0:30:18 got companies like Microsoft, Nvidia, and Oracle, who have either invested directly
0:30:24 in open AI or have formed some sort of partnership, and then you have this other insurgent AI
0:30:30 company, Anthropic, and Anthropics investors are Google, Amazon, and Salesforce, and they
0:30:33 have only invested in Anthropics.
0:30:35 They haven’t been investing in open AI.
0:30:41 The other side to this, which is interesting, is where does this leave Elon Musk?
0:30:47 He’s not really on any team, and I think that would explain his comments on Twitter, which
0:30:51 talking about the fact that they’re trying to raise $100 billion, he tweeted, quote, “They
0:30:53 don’t actually have the money.
0:30:56 SoftBank has well under $10 billion secured.
0:30:58 I have that on good authority.”
0:31:02 So he’s basically shitposting this Stargate project and saying they’re not going to pull
0:31:03 it off.
0:31:05 Sam Altman then came back at him.
0:31:10 It’s like a full-on cat fight, and he said, quote, “Wrong, as you surely know.
0:31:14 I realize what is great for the country isn’t always what’s optimal for your companies,
0:31:20 but in your new role, I hope you’ll mostly put America first.”
0:31:21 This is just fun.
0:31:23 I just love this.
0:31:29 What’s your reaction to Elon and his upset about this whole Stargate situation?
0:31:32 I’ve known a lot of billionaires, and there’s a bit of a cartoon.
0:31:36 The billionaires are Monty Burns who own the Nuclear Power Plant and crawl over people
0:31:43 and are nice people and sell organs in their spare time.
0:31:47 I have generally found that really wealthy people, especially self-made, what really wealthy
0:31:54 people are generally really nice people, really generous, really philanthropic, really polite,
0:31:59 really good manners, really patriotic, because in order to get to that level of success,
0:32:02 you have to build allies along the way.
0:32:06 I’ve never known anyone who’s due for a bigger fall than Elon Musk.
0:32:10 I think he’s pretty much alienating everybody one by one.
0:32:18 Sam Altman strikes me as very diplomatic, easy to get along with, and he’s shitposting him.
0:32:20 He’s got to be alienating Trump right now.
0:32:25 Trump doesn’t want all of this attention on a guy making faux Nazis salutes and shitposting
0:32:26 his big announcement.
0:32:28 That’s the last thing he wants from Musk.
0:32:32 You can bet everyone around Trump is going, “What the actual fuck?
0:32:34 What is this guy doing?”
0:32:39 He fired Vivek Ramaswamy, clearly he didn’t like Vivek, now Vivek’s out, and this to
0:32:43 me feels like at some point, does no club want this guy?
0:32:47 They’re like, “Okay, maybe you bring capital, maybe you bring a lot of awareness.
0:32:49 Nobody wants to deal with you.”
0:32:52 Can you imagine these guys?
0:32:55 These companies, Jensen Huang doesn’t need to put up with Elon Musk.
0:32:59 Larry Ellison is supposedly his mentor, and he’s not in this deal, but if you’re one of
0:33:05 these guys, every one of these people is a multi-billionaire, they don’t need to put
0:33:07 up with his late night tweets, and essentially …
0:33:08 Especially if they team up.
0:33:11 If they team up their capital, you don’t need them anymore.
0:33:14 They’re fine, and they’re like, every person, he’s a little bit like Trump.
0:33:21 Every person that comes into this orbit usually leaves Lesser, scathe, humiliated.
0:33:22 He doesn’t like you.
0:33:26 He weaponizes his quarter of a billion followers to mock you.
0:33:29 I’ve been waiting for the chickens to come home to roost here.
0:33:30 I don’t know if it’s going to happen.
0:33:37 I keep being wrong, but at some point, everybody’s like, “Put the angry stupid kid in the corner.
0:33:38 We’ve had it with this guy.”
0:33:39 Exactly.
0:33:43 By the way, I thought Satya Nadella had the best reaction to this.
0:33:48 He was doing this interview with Andrew Ross Sorkin at Davos, and he was explaining how
0:33:54 Microsoft is doing all of this investment in data centers and AI infrastructure, and
0:33:59 he said that Microsoft is investing $80 billion in data centers.
0:34:03 This is separate, by the way, from the Stargate situation.
0:34:11 Our boy Andrew then asked him about Elon’s comments, specifically whether Satya believes
0:34:16 that Stargate actually has the money to pull this off, and Andrew was prodding him at this.
0:34:21 Then Satya had what I think was the best one liner of the year, maybe of the decade.
0:34:25 He said, “All I know is I’m good for my $80 billion.”
0:34:26 Yeah.
0:34:27 I’m good for $80 billion.
0:34:28 That is a flax.
0:34:29 Ball and move.
0:34:30 That is a flax.
0:34:31 Yeah.
0:34:35 We’ll be right back after the break for a look at Scott Steak in a new Colombian football
0:34:36 club.
0:34:50 If you’re enjoying the show so far, hit follow and leave us a review on Proficy Markets.
0:34:53 More for the show comes from the Fundrise Innovation Fund.
0:34:55 Think of the five biggest names in AI today.
0:34:57 How many of these companies do you own shares of?
0:34:58 Probably not many.
0:35:00 Maybe one, maybe two.
0:35:01 Why is that?
0:35:04 Because the open AIs and anthropics of the world are still private.
0:35:07 That means unless you’re an employee or a VC, you’re out of luck.
0:35:11 So it isn’t hard to see why venture capital has been one of the most prized asset classes
0:35:15 in the world, but unless you’re worth eight or nine figures, you likely don’t have access
0:35:16 to these funds.
0:35:17 The Fundrise Innovation Fund is different.
0:35:20 It’s already raised more than $150 million.
0:35:24 It holds a portfolio of pre-IPO tech companies that are valued at tens or even hundreds of
0:35:25 billions of dollars.
0:35:29 And most importantly, it’s open to investors of all sizes.
0:35:33 Visit fundrise.com/prophg to check out the Innovation Fund’s portfolio and start investing
0:35:34 today.
0:35:45 Relevant disclaimers can be found at the end of the show and at fundrise.com/innovation.
0:35:47 We’re back with Proficy Markets.
0:35:53 A group of famous investors recently acquired a Colombian soccer team called La Equidad.
0:35:58 The investor group includes names like Ryan Reynolds, Rob McElhaney, Ava Longoria, Justin
0:36:03 Verlander, Kate Upton and drumroll Scott Galloway.
0:36:04 So Scott, give us the scoop.
0:36:09 How did this come about and why are you buying a Colombian soccer team?
0:36:12 Well, I mean, it’s pretty obvious that Kate Upton and Ava Longoria demanded that I be
0:36:15 in the investment group.
0:36:21 It’s easy to sort of, or a lot of people, I think, cloak their personal desires and
0:36:22 business strategy.
0:36:25 So the honest answer is kind of like midlife meets crisis.
0:36:26 We’ve talked about this.
0:36:29 I’ve wanted to be a part of an ownership for a football team.
0:36:30 I love football.
0:36:33 I’m not into sports, but I go to a lot of games with my kids.
0:36:37 I just went to a PSG game with my youngest.
0:36:41 I’d inquired, we talked about it and joked about it, but actually inquired about investing
0:36:44 in Rangers and Glasgow.
0:36:46 And it’s just, quite frankly, I’m just not in that weight class.
0:36:50 So how much is it, how expensive is Rangers?
0:36:54 Rangers you would need to come up with at least, you know, that would need to be kind
0:36:57 of an eight figure, somewhat mid eight figure.
0:37:01 You need to come up with $10 to $50 million to be really a legitimate part of their owner
0:37:02 group.
0:37:05 And so that’s out of my weight class, much less the Premier League team, which are now
0:37:07 going for billions.
0:37:13 So this is sort of a filament of something I’ve wanted to do for a long time.
0:37:14 I love football.
0:37:16 I’m all about experiences now.
0:37:19 I want to take my friends and my kids and my sons to the game.
0:37:23 So I’m just, you know, that’s how, you know, that was the initial impetus, if you will.
0:37:28 And does this fit into like a larger investment strategy or is this pure fun, pure consumption
0:37:29 in a way?
0:37:31 Well, it’s mostly consumption.
0:37:35 The thing that, this checks a lot of boxes for me.
0:37:42 The way this came about was I met Rob McElhaney, I did a show, I was on Welcome to Wrexham.
0:37:46 And I got to know a little bit about the Wrexham story with Rob and Ryan.
0:37:49 And I really am impressed and inspired by what they’ve done.
0:37:52 In addition to, you know, they’re not your typical owners just sitting looking aggrieved
0:37:56 in the owner’s box and then firing the manager every three years.
0:37:57 They took an interest in the community.
0:38:01 They’ve kind of become these de facto evangelists for the British working class and it brought
0:38:05 a lot of attention and pride to the Wrexham community.
0:38:10 So they’re the kind of the definition of stakeholders, not shareholders.
0:38:15 And I met this kid at an investment conference, so I met this group, if you will, and this
0:38:20 kid is sort of this Jonah Hill-like character in Moneyball and he scours the world for teams
0:38:25 that he feels have unregistered value, whether it’s a player development or they’re in a
0:38:32 great metro or they have a great stadium or, you know, they do a great job of maturing
0:38:34 and then selling players.
0:38:39 And he found this team, La Acuidad, and it’s a great team.
0:38:45 It’s in Bogota, which is the capital and the hub of Columbia, 11 million people.
0:38:46 It’s growing.
0:38:53 Columbia is now, I think, I don’t know, growing 2% or 3% a year, but anyways, Rob, I like
0:38:54 Rob a lot.
0:38:55 I do business with him.
0:38:59 And then when this came around and those guys were willing to be involved, it was just
0:39:01 sort of a no-brainer.
0:39:04 So I wanted to be a part of it.
0:39:09 By the way, the team’s been runner-up during Primeto League A. They’re in the top Colombian
0:39:10 league.
0:39:11 They’ve been runner-up three times.
0:39:13 They won the Copa Colombia Cup in 2008.
0:39:15 I even like their stadium.
0:39:18 It’s a 10,000-person stadium versus some of the bigger stadiums, which I think is really
0:39:21 fun.
0:39:27 But in terms of a larger investment strategy, I mean, if you think about it, the U.S. is,
0:39:29 let’s go very macro.
0:39:31 The U.S. is 5% of the world’s population.
0:39:33 It’s a third of the GDP.
0:39:37 And right now, if you look at the stock market as a proxy for asset values, it’s half the
0:39:39 world’s value.
0:39:42 So I think it’s reasonable to assume when you say, “Well, Scott, that’s just the publicly
0:39:46 traded stocks,” but you could also probably extrapolate that to private assets, too.
0:39:50 So this is how crazy things have gotten.
0:39:58 Maybe the markets are saying that the U.S. is worth as much as the rest of the world.
0:39:59 And I don’t think that’s true.
0:40:04 If someone said to me, “Bet long-term,” or right now, what is undervalued and overvalued,
0:40:08 either the U.S. or the rest of the world, I would take the rest of the world, as much
0:40:11 as I love the U.S. as impressive as it is, its AI, all that.
0:40:17 And so the way that translates into my investment strategy is slowly, but surely, I am divesting
0:40:21 out of U.S. assets into foreign assets.
0:40:24 And then the crossover is that I love Latin American culture.
0:40:26 I spent a lot of time in Brazil.
0:40:27 I love Mexico.
0:40:32 Colombia is the third-largest economy in South America.
0:40:34 And the Colombian economy is growing.
0:40:38 It popped 7% post-COVID in 2021.
0:40:41 It was up 2.2% last year.
0:40:45 It’s supposed to be up to high twos this year, 3% in 2025.
0:40:50 And also, just quite frankly, it’s just a beautiful country, Cartagena Medellin.
0:40:55 The idea to be part of an investment group, where they seem like good citizens, it’s
0:41:00 a good team that could be, I think, a great team to be part of an owner’s group that really
0:41:07 seems to care about the community and seem like good guys and a chance to spend more
0:41:11 time in Latin America, specifically in Colombia, check, check, check.
0:41:13 So this is super exciting for me.
0:41:16 And also, I think over the medium and the long term, we’re going to make money here.
0:41:21 I think this is a good team in a great country, in a growing sport with an owner’s group
0:41:25 that’ll bring a lot of attention and thoughtful management to the club.
0:41:30 At least that’s how I’m deluding myself into buying a Ferrari right now, basically.
0:41:33 Well, no, football’s growing massively.
0:41:39 I mean, the MLS, you just look at the MLS, the falsest growing sports league in America.
0:41:43 El Madrid, just a couple of weeks ago, they became the first football club in history
0:41:46 to pass a billion euros in annual revenue.
0:41:48 I mean, this is a massively growing sport.
0:41:54 But in terms of how this, how you come about this, like, how did this actually land on
0:41:55 your desk?
0:41:59 Like you said, you meet this Jonah Hill Moneyball-like character.
0:42:02 How does he know that you’re interested in doing this?
0:42:06 How does he get connected to Avalon Goria and all of these celebrities?
0:42:09 Like, how does this tangibly happen?
0:42:16 I think I was their diversity hire, I think that basically, so this group had no problem
0:42:20 raising the money and they wanted people that would either add value or they didn’t need
0:42:21 that much capital.
0:42:26 I think they wanted people who had, would raise awareness for the club, who seemed to
0:42:29 be good stakeholders or good fiduciaries.
0:42:34 And because I had met the people organizing the group and because I had met Rob, I think
0:42:37 they thought, what the hell, let that crazy professor in.
0:42:41 And they, you know, I know a decent amount about branding.
0:42:46 I’d like to think I’m a good fiduciary, I’ve served on a lot of boards and I’m, you know,
0:42:49 the world knows I love taking my sons to see the beautiful games, so maybe that’ll bring
0:42:52 some attention to the team.
0:42:54 And they know I’m, you know, they know I’ll vote with my feet.
0:42:59 I’m going to go to, chances are in the next 12 months, you’re going to be sitting at Metropolitana
0:43:07 Tech, I think it’s the name of the stadium, with me at, at a, you know, a La Aquidad game.
0:43:12 So I’m, I’m into this, I’m into this stuff and they were nice enough to, were good enough
0:43:13 to let me into the investor group.
0:43:17 So I’m, I’m super excited that it’s, it’s unlike, you know, it’s just weird that all
0:43:19 the moons line up like this.
0:43:22 If it had been a great team in Thailand, I just couldn’t have done it because I wouldn’t
0:43:23 have been able to go to games.
0:43:26 If it had been a great team in the Premier League, I wouldn’t have done it because I
0:43:28 don’t have the money.
0:43:31 And if it had been a great team, you know, at a reasonable cost with a group of people
0:43:33 I didn’t know, I wouldn’t have done it either.
0:43:35 So I’m, this, this was just like,
0:43:38 And the Colombians are just insane about their football.
0:43:41 I mean, these, these matches are going to be absolutely electric.
0:43:42 I can’t wait.
0:43:43 I can’t wait to go.
0:43:45 The stadium sold out the Colombian people.
0:43:46 I don’t know if you spend any time in Colombia.
0:43:51 It is a beautiful country and it’s sort of a remarkable turnaround.
0:43:56 So gosh, an excuse to spend time in Colombia in the auspices of a football.
0:43:57 A great investment.
0:43:59 I mean, be like investing in a strip club.
0:44:01 I mean, how can you say no?
0:44:02 Exactly.
0:44:03 That can be a good investment.
0:44:07 Talk about being a part of one of these like celebrity investor consortiums because we
0:44:12 keep on seeing these show up in different investments, usually in like consumer products,
0:44:14 CPG space is a big thing.
0:44:17 And I’m always a little bit skeptical of these celebrity investments.
0:44:20 It feels like they generate a ton of heat.
0:44:25 They make all these headlines and then they kind of like fade out into irrelevant.
0:44:30 I mean, I think of like, you know, the Kim Kardashian type investments, all of those celebrity
0:44:36 SPACs that we were seeing, like what is the actual benefit of having all of these A-listers
0:44:38 in this group?
0:44:39 Why would they target it specifically?
0:44:44 Well, I mean, the reality is we live in an attention economy and I would imagine the
0:44:49 Wrexham franchise is probably going up 10 or 20 fold in value, even if they brought
0:44:53 together really thoughtful fiduciaries and investors and people interested in football.
0:44:56 I don’t think they would have registered those sort of gains without the attention that Ryan
0:44:59 and Rob brought to the franchise.
0:45:06 So this group that includes a lot of celebrities and yours truly, I mean, and as in not, but
0:45:10 it’s also the group includes some people who really understand football and understand
0:45:11 operations.
0:45:17 So the funny thing about the announcements was I’m the and guy.
0:45:20 It would be like Ryan, you’d have a picture of Ryan and Rob.
0:45:23 Then it would say Ann Kate Upton and Justin Berlender.
0:45:26 Her husband is an amazing athlete himself.
0:45:28 And then the Eva Longoria.
0:45:31 And then it would say also joining the group.
0:45:32 I was the Ann.
0:45:33 In the seventh paragraph.
0:45:34 Yeah.
0:45:39 Almost like, I don’t know, again, I’m their DUI hire is the way I would describe me.
0:45:40 Yeah.
0:45:44 It’s, but I’m super excited about it, but I feel like it could be one of those things
0:45:49 where the happiest days in a boat owners life is when they buy it and sell it.
0:45:50 So we’ll see.
0:45:54 But right now I’m in joining the honeymoon phase and I’m planning a bunch of trips to
0:45:55 Columbia.
0:45:56 I personally cannot wait.
0:45:58 I’m going to have to do some live podcasts there.
0:46:01 And I think we should do some football themed podcast there as well, or it’s just you and
0:46:02 I.
0:46:03 100% my friend.
0:46:04 Shooting the show.
0:46:05 Like we did.
0:46:06 It’ll be amazing.
0:46:07 We are taking this team to the top.
0:46:11 Literally, we’re going to win the Copa, Columbia Cup, we’re going to win the league for the
0:46:12 first time.
0:46:13 That’s right.
0:46:14 And we’re just, we’re going to have a ton of fun.
0:46:18 And we’re going to try and add some, bring some awareness to a great city, a great country
0:46:19 and hopefully a great club.
0:46:20 Absolutely.
0:46:23 And we need to make friends with all of the most powerful people in football before the
0:46:24 World Cup.
0:46:26 That’s a really important thing here.
0:46:28 So we need to become very influential.
0:46:34 And then when 2026 comes, we need to have, you know, access to the box and, you know,
0:46:35 all the good stuff that’s going to happen in 2026.
0:46:36 Oh yeah.
0:46:40 I’m clearly getting access to the finals of the World Cup when I say I’m a minority
0:46:45 owner just behind Kate Upton and the second biggest football club in Bogota.
0:46:46 Yeah.
0:46:48 We’re, we’re a shoe in for the World Cup.
0:46:49 Let me go this way.
0:46:54 If I were you, I’d kiss the asses and product manager at AVM Bev or McDonald’s or sponsor
0:46:55 if you really want to get to the World Cup.
0:46:57 I’m not sure I’m your in.
0:47:00 You’re all, you’re all good and lock we dod.
0:47:04 You are, you’re at some point, at some point you can wave at me in the owner’s box and
0:47:05 I’m not sure I can get you in.
0:47:07 I’m not sure I can get you in.
0:47:12 But yeah, World Cup, I’m not sure, I’m not sure we’re, I’m not sure we’re money good
0:47:13 there.
0:47:14 Okay.
0:47:15 Well, we’ll, we’ll work on it.
0:47:16 Let’s take a look at the wig head.
0:47:20 We’ll see data on the personal consumption expenditures index for December.
0:47:25 And we’ll also see earnings from Microsoft, Metta, Tesla and Apple, huge earnings week
0:47:26 coming up.
0:47:28 Scott, do you have any predictions for us?
0:47:33 I think the markets or equities are moving on two things.
0:47:35 One is interesting, one is a shame.
0:47:41 The thing that’s interesting is what we referenced before and that is attention and perception
0:47:43 as opposed to underlying fundamentals.
0:47:47 And it’s always been perception and the level of attention something has is always played
0:47:52 a role, but it’s playing an increasingly outsized role as evidenced by the CEO Palantir going
0:47:57 on Bill Maher and live streams of earnings calls, you know, CEOs are figuring out, you
0:48:00 just want to be in people’s brains as much as possible.
0:48:05 And then, you know, even if you’re a manufacturing company, just use the term AI over and over
0:48:08 and your shares will pop two or 3% instead of flat.
0:48:14 The second thing is proximity to power, which is kind of the fundamental metric for a kleptocracy.
0:48:18 And that’s a shame, but that’s increasingly important, especially over the last, I don’t
0:48:23 know, 10 or 11 days as evidenced by one person’s wealth going up $140 billion, despite the fact
0:48:29 that he had, you know, his firms have not registered any tangible improvement, but the assumption
0:48:33 that we are now the market says we’re in a kleptocracy and being close to power will
0:48:34 help your companies.
0:48:39 Anyways, the chocolate and peanut butter this right now, I believe is Oracle.
0:48:43 And that is they are the perception is they’re getting closer and closer to the center or
0:48:47 the epicenter of where the greatest value creation in history has probably been.
0:48:48 And that is AI.
0:48:53 And then being invited into the Stargate group and being a key or a key pillar of it sort
0:48:57 of says they’re at now the kind of the adult table or the adults table, whereas they were
0:49:01 sort of hanging around the hoop, but now they’re, they’re in the center of AI.
0:49:06 And I think the marketplace were small possibly that in addition, Larry Ellison is very close
0:49:10 to Trump see above kleptocracy.
0:49:14 And if you look at Oracle, it trades at about eight time sales, Microsoft’s about 13 and
0:49:16 videos, I think in the low 20s.
0:49:21 And then you have your open AI is at 40 and your Anthropics at 60.
0:49:26 So I think that you’re going to see this kind of nitro and glycerin explosion in the multiple
0:49:27 on Oracle.
0:49:32 I think it’s earnings will probably improve, but more than that, it’ll register multiple
0:49:38 expansion based on its proximity to power and to the epicenter of AI.
0:49:43 So I believe or the prediction is simply put that Oracle is going to outperform the market
0:49:45 over the next six to 12 months.
0:49:48 Do you think it’ll be considered part of big tech by the end of the year?
0:49:51 I mean, it’s around a half a trillion dollars right now.
0:49:57 The big tech company is all hovering around two trillion or at least they’re above a trillion
0:49:58 dollars market cap.
0:50:01 Do you think it could reach big tech status?
0:50:07 It’ll either replace or it might become the 11th of the Magnificent 10, right?
0:50:09 That it’s going to join, that’s exactly the right analogy.
0:50:15 I think it’s a boy to join the executive washroom of tech companies and valuations.
0:50:22 I think it’s a great company, great management, and they have strong cash flows plus with
0:50:28 their existing database business and they’re going to get some, I don’t know, some sales
0:50:33 on that ship with all this AI and attention they’re about to get.
0:50:37 This episode was produced by Claire Miller and engineered by Benjamin Spencer.
0:50:41 Our associate producer is Allison Weiss, Mia Silverio is our research lead, Jessica
0:50:45 Lange is our research associate, Drew Burris is our technical director, and Catherine Dillon
0:50:47 is our executive producer.
0:50:50 Thank you for listening to ProfG Markets from the Vox Media Podcast Network.
0:50:56 Join us on Thursday for a conversation with Robert Armstrong, only on ProfG Markets.
0:51:06 [MUSIC]
0:51:33 .
0:51:35 Support for the show comes from the FunRides Innovation Fund.
0:51:39 You’ve heard me talk about the FunRides Innovation Fund before so I’ll keep this short.
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0:51:50 available to everyone.
0:51:55 And with 150 million raised from tens of thousands of investors, it’s just getting
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0:00:35 Today’s number 55.
0:00:39 That’s the percentage of toy buyers who are adults shopping for themselves.
0:00:40 True story yet.
0:00:45 I decided to make a porno in the vintage or in the genre of the movie Toy Story.
0:01:01 I call it You’ve Got a Friend in Me.
0:01:02 Welcome to Propting Markets.
0:01:08 Today’s episode is presented by Fundrise, and we’re discussing Stargate and MyStake
0:01:11 and La Equidad, the football team in Colombia.
0:01:13 But first, Ed, what is the good word?
0:01:14 What’s going on?
0:01:15 The banter?
0:01:18 Well, I think the more relevant question is what is going on with you because you just
0:01:22 came off of one of the most popular podcasts in the world, right?
0:01:23 I was on smart lists.
0:01:24 I’m still buzzing.
0:01:25 I’m still kind of nervous.
0:01:26 I was actually nervous.
0:01:28 I really wanted to impress those guys.
0:01:29 Yeah, I can tell.
0:01:30 I like Will Arnett.
0:01:31 He’s very handsome.
0:01:35 Jason Bateman is very serious, and I think Shanae’s is very talented, so they’re kind
0:01:36 of the trifecta.
0:01:37 How did it go?
0:01:38 What did you talk about?
0:01:39 I know it wasn’t a disaster.
0:01:40 What I was worried about is they do a reveal.
0:01:41 Have you listened to it?
0:01:47 Everyone’s responsible for a guest, and they describe them, and then they do the reveal.
0:01:49 I felt like I was Will’s guest.
0:01:52 Were you on the taping for the introduction?
0:01:54 Can you hear him revealing it?
0:01:55 Yeah, you’re there.
0:01:56 You do a reveal.
0:01:59 I took my hood off, like, “Oh, look who it is.”
0:02:00 They’re all like, “Oh.”
0:02:06 I thought literally, Will had showed up to a party with a bag of unshelled peanuts.
0:02:09 I’m like, “Everyone’s going to be pretend it’s nice.
0:02:10 Oh, that’s great.”
0:02:14 I guess the most important question, did Jason Bateman and Shaun Hayes know who you
0:02:15 are?
0:02:17 Jason Bateman guessed who I was.
0:02:18 Oh, really?
0:02:22 Will Arnett said a professor, and Jason went, “Propji.”
0:02:23 Wow.
0:02:28 And Sean also guessed before the end was because he knows he’s good friends with Kara Swisher,
0:02:29 so he had heard her.
0:02:30 Okay.
0:02:31 Well, look at that.
0:02:32 You’re moving up in the world.
0:02:33 A hundred percent.
0:02:37 I was just asked to be a founding member of one of those Tony members clubs.
0:02:39 I’m not going to say which one, because I’ll revoke my membership.
0:02:43 I literally, I sent it to everyone I know, and I’m like, “I am so big-time now.
0:02:48 I’m a founding member of one of these very exclusionary rejectionist douchebag clubs,
0:02:50 so it’s been a really good week.”
0:02:53 It sounds like a great week, but it means you’re going to have to make me a member.
0:02:55 That’s what I’m going to be bugging you about now.
0:02:56 Yeah.
0:02:57 I’ve decided.
0:03:00 The reason I don’t party with you guys or hang out with you socially is you have this
0:03:04 image of me, and I don’t need you to see me drunk.
0:03:05 I’ve seen you drunk.
0:03:06 I know what you’re like.
0:03:07 I don’t think I’ve ever been drunk around you.
0:03:08 Have I?
0:03:09 I’ve seen you drunk.
0:03:13 I think I saw you drunk, and I’m pretty sure you were drunk in Miami.
0:03:18 When you handed us a black card and was like, “Go, buy a bunch of champagne and get a table,”
0:03:20 you must have been at least a little bit buzzed.
0:03:21 I don’t remember it.
0:03:23 I don’t think my opinion of you would change that much.
0:03:24 I think you’re too frightened of this.
0:03:28 I think it’s impossible not to judge people by the way they behave drunk.
0:03:32 By the way, I’m absolutely a better version of me, a little bit fucked up.
0:03:33 I’m nicer.
0:03:34 You should want me to see it.
0:03:35 I’m more engaged.
0:03:36 I’m friendlier.
0:03:37 Right.
0:03:38 I’d love that.
0:03:39 What do you like drunk at?
0:03:42 I think there’s more people out there that are more interested in what you’re like when
0:03:45 you’re drunk, because you come across as so together and so buttoned up.
0:03:50 I think I’m very similar to you that I’m a lot more friendly.
0:03:51 I think I laugh a lot more.
0:03:55 I find other people funnier and more interesting when I’m drunk.
0:03:57 I think that’s the best thing about it actually.
0:04:03 It’s like I’m suddenly so excited by other people and what they have to say.
0:04:07 There’s a term that describes what you’re laying out, it’s called alcoholism.
0:04:09 All right, enough of that shit.
0:04:10 Stop drinking, get on with the headlines.
0:04:19 Let’s start with our weekly review of market vitals.
0:04:24 The S&P 500 climbed, the dollar slipped, Bitcoin was volatile, and the yield on 10-year
0:04:27 treasuries increased, shifting to the headlines.
0:04:33 Netflix added a record 19 million new subscribers in the fourth quarter, that’s up 44% from
0:04:34 a year earlier.
0:04:38 The company also beat expectations on the top and bottom lines, and announced price
0:04:45 hikes on all three U.S. plans, shares rose more than 14% to an all-time high.
0:04:50 Johnson & Johnson sales rose more than 5% year-over-year to hit $22.5 billion in the
0:04:55 fourth quarter, beating expectations, however lower than expected guidance and slower medical
0:04:58 device sales sent the stock down nearly 2%.
0:05:04 And finally, Jimmy Donaldson, also known as MrBeast, has expressed interest in buying
0:05:05 TikTok.
0:05:08 He joins a growing list of investors looking to make a bid for the app.
0:05:13 Scott, your thoughts starting with this really good quarter from Netflix.
0:05:14 Extraordinary.
0:05:19 Ted Sarandos, he has a co-CEO, his name escapes me, they’re arguably, I don’t want to call
0:05:25 them underrated, but the most least discussed, God, I’m shocked that Trump didn’t threaten
0:05:28 them with jail unless they came to the inauguration.
0:05:30 These guys are just so good.
0:05:35 There’s all of streaming, and there’s Netflix, and Netflix is worth more.
0:05:39 If its subscribers were a country, 300 million people would be the fourth largest in the
0:05:45 world in terms of population behind the U.S. and ahead of Indonesia.
0:05:51 Its full year operating margin increased 6% and net profits popped 60% year-on-year.
0:05:55 And they’re raising prices, they’ve doubled prices in the last 10 years versus inflation
0:06:00 at 33%, which is going to give them more margin and even more money to spend on more content.
0:06:03 So this company is just dominant.
0:06:04 What are your thoughts?
0:06:07 I think the most interesting thing are the price hikes you mentioned.
0:06:11 I mean, you said prices have doubled in the last 10 years.
0:06:14 That’s actually just the premium subscription that has doubled.
0:06:20 So a premium subscription now costs $25 a month, double where it was around 10 years
0:06:21 ago.
0:06:24 It’s risen faster than, of course, faster than inflation, faster than any of the other
0:06:27 pricing plans Netflix offers.
0:06:31 But to me where it gets really interesting is when we look at the difference between
0:06:37 the price of a premium subscription with Netflix and a standard subscription.
0:06:40 Because that difference has ballooned recently.
0:06:45 So 10 years ago, the difference between the most expensive and the cheapest option on
0:06:47 Netflix was only $5.
0:06:49 Today it’s a difference of $17.
0:06:52 So the Delta has more than three Xs.
0:06:57 And to me, this is a prime example of what you have pointed to in the past, which is
0:07:02 I think what I would call inequality pricing, where you have this growing disparity between
0:07:03 the rich and the poor in America.
0:07:09 And it’s now being reflected in the pricing strategies of even our most basic products
0:07:10 like Netflix.
0:07:15 I mean, we used to see this a lot in air travel or in events, but we’re now seeing it in very
0:07:18 standard consumer categories like streaming.
0:07:23 So it feels like this tiered pricing strategy is basically becoming ubiquitous.
0:07:28 It’s like we increasingly have products for poor people and products for rich people.
0:07:30 And that applies to streaming.
0:07:34 It applies to dating apps, which we’ve talked about, even clothes and even food.
0:07:39 There are very few instances today, it feels like, where a rich person and a poor person
0:07:40 are buying the same thing.
0:07:46 Yeah, but Netflix is trying to have it both ways in the sense that there’s usually Android
0:07:47 and iOS.
0:07:52 iOS is a phone that costs three times the monthly salary of a Hungarian citizen, and
0:07:55 Android is essentially free with a phone contract.
0:07:57 And the world has kind of gone iOS and Android across most categories.
0:08:00 It’s Tiffany or Walmart, right?
0:08:02 It’s Emirates Airlines or Southwest.
0:08:07 In the case of Netflix, they said, I mean, that appetite, their appetite is so voracious.
0:08:08 Oh, they’ll never do original programming.
0:08:11 They just do CDs or DVDs of other movies now.
0:08:14 They go into original programming with House of Cards.
0:08:17 Oh, they’ll never do live events.
0:08:20 Some of the biggest live events ever streamed, right?
0:08:23 They’re absolutely going to go into news.
0:08:24 They will never go into advertising.
0:08:28 Well, now they have an ad-supported tier, and I believe 55% of their new signups are from
0:08:32 the ad tier, which I was very skeptical on, and I was wrong.
0:08:34 So they’re basically segmenting the market.
0:08:36 Well, who could afford $25 a month?
0:08:38 I mean, that’s only for the top, top, top.
0:08:39 That’s right.
0:08:41 But still a lot of people are going to pay that.
0:08:49 So they’ve basically said, I mean, they’re going after all of media.
0:08:54 I wouldn’t be surprised if at some point they have a music offering.
0:08:55 They’re looking at everything.
0:09:00 But broadcast television used to be, well, I always have sports, right?
0:09:03 Because we’re the only ones that can aggregate this large an audience for advertisers so
0:09:06 we can pay the NFL or the MLB more.
0:09:12 And basically Amazon and now Netflix have said, nope, we’re going to go into live sports.
0:09:16 And then they said, well, we’ll always have ad-supported television for old people who
0:09:19 don’t want to spend the money for premium content.
0:09:22 Nope, we’re going to give them an ad tier.
0:09:28 So Netflix is essentially coming for everyone’s lunch in traditional broadcast media, and
0:09:30 they’re winning.
0:09:34 This isn’t one of those earnings calls where a chip company reports a great quarter and
0:09:38 all the peer group goes up in sympathy.
0:09:40 This is getting to the point where it’s a zero-sum game.
0:09:42 I don’t think people are spending more money on streaming.
0:09:50 And for them to add this many consumers and to have this pricing power, I’d hate to be
0:09:52 the Ellison kid right now.
0:09:56 I just don’t think, I mean, granted, I’d like to be a billionaire son, maybe I wouldn’t
0:09:58 hate to be him.
0:10:03 But these guys are growing so fast, they’re running away with it, there’s no way they aren’t
0:10:05 sucking the oxygen out of the room for the other players.
0:10:06 Yeah.
0:10:13 Let’s move on to Johnson and Johnson, $23 billion in revenue, up 5% from last year.
0:10:18 I’d like to just quickly compare this to United Health and their earnings, which we discussed
0:10:19 last week.
0:10:24 So on the United Health earnings call, the tone as we discussed was quite somber.
0:10:28 They addressed this Brian Thompson shooting, and then they went into this discussion about
0:10:30 the high cost of healthcare in America.
0:10:35 And they argued, whether we believe them or not, that actually these high costs are not
0:10:36 their fault.
0:10:41 It’s not the insurance companies, it’s the fault of the drug manufacturers.
0:10:46 So companies like Merck, companies like Pfizer, and yes, Johnson and Johnson.
0:10:51 So I went into this earnings call from Johnson and Johnson, expecting them to address this.
0:10:57 Not necessarily the shooting, but at least the healthcare industry overall, maybe some
0:10:59 of the conversations that are happening around it.
0:11:05 There was not one word on this earnings call about the cost of healthcare in America.
0:11:09 They talked about margins, they talked about taxes, foreign exchange, et cetera, but nothing
0:11:10 on costs.
0:11:15 And what that leads me to believe is that Johnson and Johnson doesn’t think that they need to
0:11:16 address this.
0:11:23 They probably think, probably correctly, that the public, well, they’re not blaming us,
0:11:26 they’re blaming the insurance companies, they all hate United Health.
0:11:30 So let’s not touch this.
0:11:34 I guess I just find this upsetting, and I have some data that I can point to, but first
0:11:38 I just, let’s just get your reaction to my thoughts here.
0:11:42 Shouldn’t Johnson and Johnson at least be touching this?
0:11:43 Should they yes?
0:11:45 Would it have been smart for shareholders?
0:11:46 No.
0:11:47 And I’m sure what they’ve done is the following.
0:11:51 They’ve had every crisis expert in the world coach them, and then they went out and did
0:11:56 some testing across messaging, and they found that the easiest thing to do, they probably
0:12:01 found that the majority of consumers don’t immediately affiliate them with what is taking
0:12:03 place in healthcare.
0:12:08 So the ultimate strategy they came away with was, don’t get near it.
0:12:12 Because it’s like when Lyndon Johnson said, they said, well, he’s not guilty of that.
0:12:16 And it was like, well, make him deny it, accuse him of it and make him deny it.
0:12:20 I think even bringing it up, they decided that even bringing it up or addressing it head
0:12:26 on was just going to raise it as an issue amongst a bunch of people who hadn’t connected
0:12:28 them with the issue yet.
0:12:34 Now we’ll see people, look, I think for the most part, the analysts on the call in the
0:12:37 investor public wants to know what they’re doing around shareholder value.
0:12:38 Yeah, exactly.
0:12:45 But I’m obviously going to do my job as the media guy to address it and put them in the
0:12:46 conversation.
0:12:47 You mean as the whiny millennia?
0:12:48 Yeah, exactly.
0:12:50 The whiny Gen Z guy.
0:12:51 Oh, Gen Z.
0:12:52 That’s who you are, sir.
0:12:53 Yeah, exactly.
0:12:55 Don’t mislabel me.
0:13:01 I just want to point out that the reality is that these companies like Johnson & Johnson
0:13:05 are just as much to blame for health care costs as anyone else.
0:13:09 And there’s this stat that I find quite interesting.
0:13:14 Of all of the verticals in the health care sector, the vertical with the highest margins
0:13:17 by far is pharmaceutical manufacturing.
0:13:23 They deliver on average profit margins of 26%.
0:13:28 You compare that to the insurance companies, it’s only 3%.
0:13:34 So if there’s anyone who’s extracting this value out of the health care industry and
0:13:39 perhaps too much more than they deserve, I think you could make the argument that it’s
0:13:43 Johnson & Johnson and the other pharmaceutical manufacturers.
0:13:47 So I think my takeaway here is if we’re going to have this criticism of the health care
0:13:52 industry, if we’re going to engage in that conversation, we have to make the manufacturer
0:13:53 is part of that conversation.
0:13:57 We have to talk about Merck, we have to talk about Pfizer, we have to talk about Abbey,
0:13:59 we have to talk about Johnson & Johnson.
0:14:06 We could talk about United Health too, but that’s just, that’s not the whole story.
0:14:11 There are other people whose feet we should be holding to the fire and the fact that Johnson
0:14:16 & Johnson believes that they can release earnings without even addressing this, without
0:14:17 even mentioning it.
0:14:23 To me, that’s a big problem and to me, that shows that the discourse is not fully informed
0:14:24 yet.
0:14:27 I think you’re being heavy-handed with the wrong people and that is there’s always this
0:14:32 trope or there’s always this zeitgeist or expectation that CEOs need to be more thoughtful
0:14:34 about society.
0:14:40 In my 30 years of being in the business world and following CEOs and launching red phones
0:14:45 from Bono and talking about stakeholders versus shareholders, I find all CEOs generally speaking
0:14:49 are totally focused on getting a home in the Hamptons by getting the stock price up, full
0:14:53 stop, full stop, almost nothing else.
0:14:58 They’ll give some verbiage to the climate or water or making women feel better about
0:15:03 themselves, whatever it is, at the end of the day, 99% of their human capital in that
0:15:06 position is going to getting the share price up.
0:15:07 I think who has failed here-
0:15:08 It regulates us now.
0:15:14 Well, is the U.S. who has failed to elect people who will stand up to the pharmaceutical
0:15:20 lobby and say, “Look, elected representative, if you don’t vote for this bill that’s going
0:15:26 to give us Medicaid the ability to buy drugs from Canada or negotiate with pharmaceutical
0:15:30 companies directly, I’m going to boot you out of office because I’m paying double for
0:15:33 my healthcare what they are in Canada.”
0:15:39 I think it’s on us to elect people that for some reason have let these companies, despite
0:15:45 the fact these drugs are discovered and manufactured and distributed in the U.S., that we pay more
0:15:46 for them.
0:15:47 Why?
0:15:52 Because these companies give lawmakers money who then pass laws that give them unearned
0:15:55 margin that raises the prices on Americans.
0:15:57 Again, I go back to the same thing.
0:15:58 They’re doing their job.
0:15:59 That’s what they do.
0:16:00 That’s what they will always do.
0:16:02 It’s us that’s not doing our job.
0:16:03 I totally agree with that.
0:16:04 I just want to be clear.
0:16:07 I’m not blaming the CEOs for that.
0:16:12 What I’m doing is I’m bringing attention to the fact that this is happening such that
0:16:17 eventually, as you say, we start holding our elected representatives accountable and we
0:16:20 start getting proper regulation to help ourselves.
0:16:25 But I think to get to that point, we need to understand the issues a little bit more.
0:16:32 We need to know who is screwing us over and then we need to be loud and aggressive about
0:16:37 addressing that with our elected representatives and to make sure that regulations actually
0:16:38 protect us.
0:16:41 But let’s just finish off these headlines here.
0:16:44 MrBeast is making a bid to buy TikTok.
0:16:48 He’s one of many groups bidding.
0:16:54 We also have Kevin O’Leary, the Shark Tank guy who’s joining up with Frank McCourt, who’s
0:16:58 the former owner of the LA Dodgers, they’re making a bid.
0:17:03 We’ve also seen Perplexity, the AI startup, talking about making an offer.
0:17:07 We’ve seen kick this live streaming platform that has also expressed interest.
0:17:11 And then of course, there are the suggestions we heard from Donald Trump last week.
0:17:14 He said he’d be open to Elon Musk buying TikTok.
0:17:18 I don’t think Elon Musk has said anything himself about that interest, but there are
0:17:19 rumors.
0:17:24 And he’s also said he’d be open to Larry Ellison, the founder of Oracle buying TikTok.
0:17:28 Lot of people on this list, a lot of rumors kind of swirling around.
0:17:32 Do you have any predictions, Scott, on who is going to end up owning this thing?
0:17:37 I think there’s so many moving parts here, it’s difficult to predict, but the three criteria
0:17:39 are the following, capital.
0:17:42 That takes MrBeast and MrWonderful.
0:17:47 They just don’t have the capital and they’re just saying, look at me right now.
0:17:49 It’s a way to get your name in the headlines.
0:17:54 I would say that’s like 0.1% chance they’re going to be involved in a deal.
0:17:56 You need massive capital.
0:18:01 You also need massive compute because it’s not like you can spin up that type of compute
0:18:04 to handle that type of app overnight.
0:18:09 And more than anything is the third C or the third and the fourth, you need the CCP.
0:18:14 I just think the Chinese Communist Party is going to decide who gets this or who doesn’t.
0:18:16 And so who kind of fits those criteria?
0:18:18 One, it might be nobody at all.
0:18:24 It might be, all right, the US claim passed a law with 80 senators, 79 senators signed
0:18:28 into law, and then they blinked when the deadline came.
0:18:29 They had six months.
0:18:33 Now I just don’t see why they would feel any sense of urgency to do anything.
0:18:34 It’s 20% of the revenue.
0:18:38 They might just say to the good folks at ByteDance, sorry that we’re not putting up with this.
0:18:42 You’re going to have to grow the stakeholder value in other nations.
0:18:44 We’re not acquiescing to this bullshit.
0:18:45 We don’t want to set this precedent.
0:18:48 If they do a deal, it’s going to be sold to someone who they think they have leverage
0:18:50 over.
0:18:57 Capital compute and CCP leverage, that kind of adds up to sort of what I call an Ellison
0:19:05 Musk-Microsoft kind of triopoly because people will say, oh, he’s just Elon being Elon.
0:19:06 He’s got Asperger’s.
0:19:09 He says things he shouldn’t, but that’s part of his genius.
0:19:12 You can’t have a genius like that who doesn’t make these errant mistakes.
0:19:13 That’s the beauty of him.
0:19:14 He’s so raw.
0:19:15 Guess what?
0:19:19 When’s the last time you heard him say anything offensive about China?
0:19:21 He doesn’t.
0:19:26 He seems to have remarkable maturity and self-control around China.
0:19:30 In Brazil, stuck up the middle finger to him and said, no, we’re passing this on, we’re
0:19:32 kicking your ass out unless you do the following things.
0:19:35 All of a sudden, he’s gone quiet on Brazil.
0:19:38 He is very capable of acquiescing.
0:19:44 He’s a big free speech advocate until he’s doing Twitter in Turkey and Erdogan says,
0:19:45 no, that won’t hunt here.
0:19:46 He says, no problem.
0:19:47 No problem.
0:19:50 We’ll censor like fucking crazy here.
0:19:56 Given that he has factories and a lot of business in China, I think that CCP probably
0:19:58 looks at him and says, that’s our boy.
0:20:03 We have leverage over this guy and then Trump is going to get some optics around picking
0:20:09 his buddies, his conservative buddies, which is again, see above kleptocracy, but I think
0:20:15 the good money is on one of two things, nothing, the deal doesn’t get done or it’s done based
0:20:21 on what the CCP sees as still them still having leverage over whoever, whoever quote
0:20:25 unquote owns this platform or rents it or leases it.
0:20:29 This is going to be a, if this deal happens, it’s going to be a pretzel deal where the
0:20:34 administration tries to take credit for the deal and people try to pretend it’s, the CCP
0:20:35 isn’t still involved.
0:20:37 I just think this is going to be a Frankenstein.
0:20:38 Yeah.
0:20:42 It does also feel that Larry Ellison seemed like Larry Ellison could be a really good
0:20:43 pick.
0:20:45 I mean, he does a lot of business with China through Oracle.
0:20:50 Oracle also has that relationship with TikTok where they handle all of the security in Texas
0:20:56 and he, unlike Mr. Wonderful and Mr. Beast, is a mega, mega, mega billionaire.
0:21:00 So it does feel like, and by the way, he’s newly kind of friends with Trump as we’ll
0:21:02 get to in a moment.
0:21:04 So he does seem like a good pick.
0:21:09 Just one side note, wouldn’t it be just so fucking awful if Elon Musk owns TikTok?
0:21:15 I don’t want to go down this rabbit hole, but like, God, it’s just going to be a shitstorm
0:21:17 in the news about Elon again.
0:21:22 I mean, first it was Twitter and now if he would own an even bigger platform that has
0:21:27 even more power and influence, God, I just think it’s going to be really terrible for
0:21:28 anyone who listens to the news.
0:21:29 I don’t know.
0:21:34 I think a guy who makes faux Nazi salutes, I’m not worried about that.
0:21:36 It would be the worst outcome possible.
0:21:40 I think of all the outcomes, at least from my perspective, it would be the worst one.
0:21:41 Yeah.
0:21:46 The idea of him having more power and also controlling what goes through the neural jack
0:21:52 into our use head, yeah, I don’t, I agree with you that it’s not a pleasant thought.
0:21:54 We’ll be right back after the break with a look at Project Stargate.
0:21:59 If you’re enjoying the show so far and you haven’t subscribed, be sure to give Prof.
0:22:09 G. Markets a follow wherever you get your podcasts.
0:22:11 Support for the show comes from the Funrise Innovation Fund.
0:22:15 The investing world seems to be vending towards democratization, but venture capital always
0:22:18 felt like it may be one of the last ivory towers to fall.
0:22:22 It requires a lot of capital, the right relationships, et cetera, et cetera.
0:22:27 That’s probably why when the Funrise Innovation Fund launched promising to democratize venture
0:22:29 capital, there was a lot of skepticism.
0:22:33 But the progress they’ve made in a few years is hard to argue with the innovation fund has
0:22:39 now built a $150 million portfolio of some of the most highly sought after private tech
0:22:40 companies in the world.
0:22:45 Their minimum investment is just $10, which is virtually unheard of for venture capital.
0:22:49 Look, even the best venture funds should be categorized as high risk investments.
0:22:53 Venture investing is not, for everyone, see above, high risk.
0:22:57 But at a minimum, you can visit fundrise.com/profg to check out the innovation funds portfolio
0:22:59 for yourself.
0:23:04 Visit fundrise.com/profg to check out the innovation funds portfolio and start investing today.
0:23:08 Relevant disclaimers can be found at the end of the show and at fundrise.com/innovation.
0:23:19 We’re back with ProfG Markets.
0:23:25 OpenAI, Oracle, and SoftBank are teaming up to invest as much as $500 billion to build
0:23:27 data centers in the US.
0:23:31 This will all be under a new venture called Stargate.
0:23:36 Trump announced the venture while Sam Altman, Larry Ellison, and Masayoshi Son stood behind
0:23:37 him.
0:23:43 The US data center, operated by Oracle and utilized by OpenAI, will be located in Texas.
0:23:45 Scott, huge move here.
0:23:49 They say they’re going to immediately deploy $100 billion.
0:23:54 It will amount to half a trillion over the next four years or so.
0:23:56 Any initial reactions to Stargate?
0:23:57 It’s brilliant branding.
0:24:01 Basically, the Trump administration took a bunch of efforts that were already underway
0:24:05 and then pretended that he owned it and it was his idea and branded it.
0:24:07 I don’t believe the government is putting any money into it.
0:24:08 They’re not.
0:24:12 This is an initiative that was already half-baked under the Biden administration, but the Biden
0:24:15 administration decided not to brand it or announce it.
0:24:20 Trump stepped in and said, “Stargate, it’s brilliant on the part of the administration.
0:24:25 I have no idea what the fuck Masayoshi Son is doing in this.”
0:24:28 Masayoshi Son is the luckiest investor in the world.
0:24:34 I think he invested $20 million in Alibaba and it ended up being worth $50 billion.
0:24:36 It’s the greatest venture investment in history since then.
0:24:38 He sold NVIDIA in 2019.
0:24:39 Yeah.
0:24:42 Since then, he’s been arguably the worst investor in the world.
0:24:47 My theory is that he’s actually a CAO officer who’s been charged with repatriating a ton
0:24:56 of cash out of the Gulf back to American entrepreneurs, that he’s a Korean-born Japanese national
0:25:02 that has figured out a way to extract all the margin from Gulf oil wealth and get it
0:25:03 back to Western democracies.
0:25:05 Anyways, that’s my theory.
0:25:06 That’s what I’m going with.
0:25:07 That’s a pretty good skill.
0:25:08 I’d like to be good at that.
0:25:09 Right?
0:25:11 It’s like an episode of “Homeland,” but I don’t know what he’s doing in this.
0:25:18 The thing that’s really interesting about it is that I think that for the first time,
0:25:25 really, this solidifies Oracle’s seat at the big boy’s table, at the adult table, because
0:25:31 NVIDIA is involved in here, open AI is involved in here, and there’s Gulf money, I think they’re
0:25:34 called MGX or something.
0:25:38 The two big winners here are Trump, who got to brand it and got a freebie.
0:25:39 He got to take credit for it.
0:25:43 He’s like that marathon runner who showed up in mile 26 and then ran through the tape
0:25:48 and pretended that she had won it, and also Larry Ellison and Oracle.
0:25:53 I think Oracle being at this seat makes them look really good.
0:25:58 I think this brought him up to fourth richest person in the world, so he’s definitely happy.
0:26:02 Just to go over the basic structure here, because it is a little bit confusing what
0:26:05 actually is this thing, Stargate.
0:26:10 According to OpenAI, this will be a new company, and the owners of this company, either people
0:26:18 who actually hold equity, they are OpenAI, Oracle, this company, MGX, which is this investment
0:26:24 firm owned by the United Arab Emirates, and SoftBank.
0:26:26 That explains why Master Sin is there.
0:26:29 These SoftBank are going to be putting up the money here.
0:26:32 Now, they’ve also announced a list of their technology partners.
0:26:38 These people or these companies won’t necessarily be investing directly into the venture itself,
0:26:43 but they will be employing them, and they’ll be building out these contracts to build these
0:26:51 data centers, and those include Oracle, NVIDIA, ARM, and Microsoft.
0:26:56 This is a huge coalition of companies.
0:27:01 Most of the big AI companies are on this list, which I think is why it’s quite interesting
0:27:08 to look at who isn’t on this list, and I think the big names that come to mind here who didn’t
0:27:15 make the cut, they are Google, Amazon, Meta, and Thropic, and I think we’ve got to mention
0:27:20 Elon Musk in some way, so Elon Musk’s company, XAI.
0:27:26 First off, why do you think those companies weren’t led into the club here, or more importantly,
0:27:30 who do you think decided that these companies weren’t going to be led into the club?
0:27:32 Was this Sam Altman behind this?
0:27:36 Was it Masayoshi San, Larry Ellison, maybe even Donald Trump?
0:27:40 I have no idea, but maybe you could speculate.
0:27:41 I don’t think it was Trump.
0:27:46 This is how club deals come together, and that is a private equity, someone with a vision
0:27:49 for this thing calls their buddy at … It might have been Sam Altman.
0:27:53 If I had to guess, I would say it was probably Sam Altman who said, “All right, I need to
0:27:55 bulk up fast.
0:27:56 I like the guy.
0:27:57 Jensen and I get along.
0:27:58 We have a shared vision.
0:28:00 I’m buying a ton of his chips.
0:28:01 We get along.”
0:28:07 Then he called Larry Ellison, and they sort of said, “Okay,” and Larry said, “Fine, but
0:28:09 I don’t want Microsoft in the deal.
0:28:10 Are they going to be in the deal?
0:28:14 Because I see them as my competitor now,” and they said, “No,” and you form a consortium
0:28:16 in a club.
0:28:21 What will likely happen is this will inspire another consortium that consists of the players
0:28:23 you mentioned who aren’t in this group.
0:28:26 This stuff is more informal than you might think.
0:28:28 One person has a vision and calls.
0:28:33 Sam Altman can get anyone on the line right away, and he can say, “I have a vision for
0:28:34 something.
0:28:35 This is going to require a lot of capital.
0:28:36 I’m going to need partners.
0:28:37 This is the vision.
0:28:38 This is the role you would play.
0:28:39 Are you interested?”
0:28:45 NVIDIA says, “Yeah, I’m interested, but you can’t have another chipmaker,” and somehow
0:28:48 Masayoshi Assange showed up, and they called him, and he said, “I can get a bunch of money
0:28:49 out of the golf.”
0:28:50 I don’t know.
0:28:55 They all supposedly bring something, but these deals are more based on relationships,
0:28:57 and then they figure out the strategy.
0:29:02 These are very smart people, but I imagine this didn’t happen in the last five or seven
0:29:03 days.
0:29:05 This has been being baked for probably six months, but the reason why I think it was
0:29:10 Altman was I remember him saying, “I need to raise a trillion dollars to build a compute
0:29:16 that’s going to be required for AI,” and everyone was like, “Whoa, a trillion dollars.”
0:29:19 He was seriously saying, he was the first person, the first entrepreneur to say, “I
0:29:23 need to raise a trillion dollars to do this,” and this is saying 100 billion to get started,
0:29:27 500 billion down the road, but my guess is they all know each other.
0:29:28 They like each other.
0:29:33 There’s a strategic fit, mostly with all of these players, but it’s relationships.
0:29:35 It’s people calling each other and saying, “I have an idea.”
0:29:36 Yeah.
0:29:38 The relationships that are forming are so interesting.
0:29:43 I’ve talked before about how I believe that Big Tech is collaborating to create this monopoly
0:29:47 in AI because all of these companies, they’re investing in each other’s AI companies, and
0:29:51 it’s all turning into this one mega company.
0:29:55 With this project, though, I am starting to see it a little differently.
0:30:01 More as you say, it feels like there’s a consortium developing, and that’s one team,
0:30:06 and I think we could probably call it the open AI team, and then there’s the other guys.
0:30:12 I think it would be fair to call that the Anthropic team because what you have now, you’ve
0:30:18 got companies like Microsoft, Nvidia, and Oracle, who have either invested directly
0:30:24 in open AI or have formed some sort of partnership, and then you have this other insurgent AI
0:30:30 company, Anthropic, and Anthropics investors are Google, Amazon, and Salesforce, and they
0:30:33 have only invested in Anthropics.
0:30:35 They haven’t been investing in open AI.
0:30:41 The other side to this, which is interesting, is where does this leave Elon Musk?
0:30:47 He’s not really on any team, and I think that would explain his comments on Twitter, which
0:30:51 talking about the fact that they’re trying to raise $100 billion, he tweeted, quote, “They
0:30:53 don’t actually have the money.
0:30:56 SoftBank has well under $10 billion secured.
0:30:58 I have that on good authority.”
0:31:02 So he’s basically shitposting this Stargate project and saying they’re not going to pull
0:31:03 it off.
0:31:05 Sam Altman then came back at him.
0:31:10 It’s like a full-on cat fight, and he said, quote, “Wrong, as you surely know.
0:31:14 I realize what is great for the country isn’t always what’s optimal for your companies,
0:31:20 but in your new role, I hope you’ll mostly put America first.”
0:31:21 This is just fun.
0:31:23 I just love this.
0:31:29 What’s your reaction to Elon and his upset about this whole Stargate situation?
0:31:32 I’ve known a lot of billionaires, and there’s a bit of a cartoon.
0:31:36 The billionaires are Monty Burns who own the Nuclear Power Plant and crawl over people
0:31:43 and are nice people and sell organs in their spare time.
0:31:47 I have generally found that really wealthy people, especially self-made, what really wealthy
0:31:54 people are generally really nice people, really generous, really philanthropic, really polite,
0:31:59 really good manners, really patriotic, because in order to get to that level of success,
0:32:02 you have to build allies along the way.
0:32:06 I’ve never known anyone who’s due for a bigger fall than Elon Musk.
0:32:10 I think he’s pretty much alienating everybody one by one.
0:32:18 Sam Altman strikes me as very diplomatic, easy to get along with, and he’s shitposting him.
0:32:20 He’s got to be alienating Trump right now.
0:32:25 Trump doesn’t want all of this attention on a guy making faux Nazis salutes and shitposting
0:32:26 his big announcement.
0:32:28 That’s the last thing he wants from Musk.
0:32:32 You can bet everyone around Trump is going, “What the actual fuck?
0:32:34 What is this guy doing?”
0:32:39 He fired Vivek Ramaswamy, clearly he didn’t like Vivek, now Vivek’s out, and this to
0:32:43 me feels like at some point, does no club want this guy?
0:32:47 They’re like, “Okay, maybe you bring capital, maybe you bring a lot of awareness.
0:32:49 Nobody wants to deal with you.”
0:32:52 Can you imagine these guys?
0:32:55 These companies, Jensen Huang doesn’t need to put up with Elon Musk.
0:32:59 Larry Ellison is supposedly his mentor, and he’s not in this deal, but if you’re one of
0:33:05 these guys, every one of these people is a multi-billionaire, they don’t need to put
0:33:07 up with his late night tweets, and essentially …
0:33:08 Especially if they team up.
0:33:11 If they team up their capital, you don’t need them anymore.
0:33:14 They’re fine, and they’re like, every person, he’s a little bit like Trump.
0:33:21 Every person that comes into this orbit usually leaves Lesser, scathe, humiliated.
0:33:22 He doesn’t like you.
0:33:26 He weaponizes his quarter of a billion followers to mock you.
0:33:29 I’ve been waiting for the chickens to come home to roost here.
0:33:30 I don’t know if it’s going to happen.
0:33:37 I keep being wrong, but at some point, everybody’s like, “Put the angry stupid kid in the corner.
0:33:38 We’ve had it with this guy.”
0:33:39 Exactly.
0:33:43 By the way, I thought Satya Nadella had the best reaction to this.
0:33:48 He was doing this interview with Andrew Ross Sorkin at Davos, and he was explaining how
0:33:54 Microsoft is doing all of this investment in data centers and AI infrastructure, and
0:33:59 he said that Microsoft is investing $80 billion in data centers.
0:34:03 This is separate, by the way, from the Stargate situation.
0:34:11 Our boy Andrew then asked him about Elon’s comments, specifically whether Satya believes
0:34:16 that Stargate actually has the money to pull this off, and Andrew was prodding him at this.
0:34:21 Then Satya had what I think was the best one liner of the year, maybe of the decade.
0:34:25 He said, “All I know is I’m good for my $80 billion.”
0:34:26 Yeah.
0:34:27 I’m good for $80 billion.
0:34:28 That is a flax.
0:34:29 Ball and move.
0:34:30 That is a flax.
0:34:31 Yeah.
0:34:35 We’ll be right back after the break for a look at Scott Steak in a new Colombian football
0:34:36 club.
0:34:50 If you’re enjoying the show so far, hit follow and leave us a review on Proficy Markets.
0:34:53 More for the show comes from the Fundrise Innovation Fund.
0:34:55 Think of the five biggest names in AI today.
0:34:57 How many of these companies do you own shares of?
0:34:58 Probably not many.
0:35:00 Maybe one, maybe two.
0:35:01 Why is that?
0:35:04 Because the open AIs and anthropics of the world are still private.
0:35:07 That means unless you’re an employee or a VC, you’re out of luck.
0:35:11 So it isn’t hard to see why venture capital has been one of the most prized asset classes
0:35:15 in the world, but unless you’re worth eight or nine figures, you likely don’t have access
0:35:16 to these funds.
0:35:17 The Fundrise Innovation Fund is different.
0:35:20 It’s already raised more than $150 million.
0:35:24 It holds a portfolio of pre-IPO tech companies that are valued at tens or even hundreds of
0:35:25 billions of dollars.
0:35:29 And most importantly, it’s open to investors of all sizes.
0:35:33 Visit fundrise.com/prophg to check out the Innovation Fund’s portfolio and start investing
0:35:34 today.
0:35:45 Relevant disclaimers can be found at the end of the show and at fundrise.com/innovation.
0:35:47 We’re back with Proficy Markets.
0:35:53 A group of famous investors recently acquired a Colombian soccer team called La Equidad.
0:35:58 The investor group includes names like Ryan Reynolds, Rob McElhaney, Ava Longoria, Justin
0:36:03 Verlander, Kate Upton and drumroll Scott Galloway.
0:36:04 So Scott, give us the scoop.
0:36:09 How did this come about and why are you buying a Colombian soccer team?
0:36:12 Well, I mean, it’s pretty obvious that Kate Upton and Ava Longoria demanded that I be
0:36:15 in the investment group.
0:36:21 It’s easy to sort of, or a lot of people, I think, cloak their personal desires and
0:36:22 business strategy.
0:36:25 So the honest answer is kind of like midlife meets crisis.
0:36:26 We’ve talked about this.
0:36:29 I’ve wanted to be a part of an ownership for a football team.
0:36:30 I love football.
0:36:33 I’m not into sports, but I go to a lot of games with my kids.
0:36:37 I just went to a PSG game with my youngest.
0:36:41 I’d inquired, we talked about it and joked about it, but actually inquired about investing
0:36:44 in Rangers and Glasgow.
0:36:46 And it’s just, quite frankly, I’m just not in that weight class.
0:36:50 So how much is it, how expensive is Rangers?
0:36:54 Rangers you would need to come up with at least, you know, that would need to be kind
0:36:57 of an eight figure, somewhat mid eight figure.
0:37:01 You need to come up with $10 to $50 million to be really a legitimate part of their owner
0:37:02 group.
0:37:05 And so that’s out of my weight class, much less the Premier League team, which are now
0:37:07 going for billions.
0:37:13 So this is sort of a filament of something I’ve wanted to do for a long time.
0:37:14 I love football.
0:37:16 I’m all about experiences now.
0:37:19 I want to take my friends and my kids and my sons to the game.
0:37:23 So I’m just, you know, that’s how, you know, that was the initial impetus, if you will.
0:37:28 And does this fit into like a larger investment strategy or is this pure fun, pure consumption
0:37:29 in a way?
0:37:31 Well, it’s mostly consumption.
0:37:35 The thing that, this checks a lot of boxes for me.
0:37:42 The way this came about was I met Rob McElhaney, I did a show, I was on Welcome to Wrexham.
0:37:46 And I got to know a little bit about the Wrexham story with Rob and Ryan.
0:37:49 And I really am impressed and inspired by what they’ve done.
0:37:52 In addition to, you know, they’re not your typical owners just sitting looking aggrieved
0:37:56 in the owner’s box and then firing the manager every three years.
0:37:57 They took an interest in the community.
0:38:01 They’ve kind of become these de facto evangelists for the British working class and it brought
0:38:05 a lot of attention and pride to the Wrexham community.
0:38:10 So they’re the kind of the definition of stakeholders, not shareholders.
0:38:15 And I met this kid at an investment conference, so I met this group, if you will, and this
0:38:20 kid is sort of this Jonah Hill-like character in Moneyball and he scours the world for teams
0:38:25 that he feels have unregistered value, whether it’s a player development or they’re in a
0:38:32 great metro or they have a great stadium or, you know, they do a great job of maturing
0:38:34 and then selling players.
0:38:39 And he found this team, La Acuidad, and it’s a great team.
0:38:45 It’s in Bogota, which is the capital and the hub of Columbia, 11 million people.
0:38:46 It’s growing.
0:38:53 Columbia is now, I think, I don’t know, growing 2% or 3% a year, but anyways, Rob, I like
0:38:54 Rob a lot.
0:38:55 I do business with him.
0:38:59 And then when this came around and those guys were willing to be involved, it was just
0:39:01 sort of a no-brainer.
0:39:04 So I wanted to be a part of it.
0:39:09 By the way, the team’s been runner-up during Primeto League A. They’re in the top Colombian
0:39:10 league.
0:39:11 They’ve been runner-up three times.
0:39:13 They won the Copa Colombia Cup in 2008.
0:39:15 I even like their stadium.
0:39:18 It’s a 10,000-person stadium versus some of the bigger stadiums, which I think is really
0:39:21 fun.
0:39:27 But in terms of a larger investment strategy, I mean, if you think about it, the U.S. is,
0:39:29 let’s go very macro.
0:39:31 The U.S. is 5% of the world’s population.
0:39:33 It’s a third of the GDP.
0:39:37 And right now, if you look at the stock market as a proxy for asset values, it’s half the
0:39:39 world’s value.
0:39:42 So I think it’s reasonable to assume when you say, “Well, Scott, that’s just the publicly
0:39:46 traded stocks,” but you could also probably extrapolate that to private assets, too.
0:39:50 So this is how crazy things have gotten.
0:39:58 Maybe the markets are saying that the U.S. is worth as much as the rest of the world.
0:39:59 And I don’t think that’s true.
0:40:04 If someone said to me, “Bet long-term,” or right now, what is undervalued and overvalued,
0:40:08 either the U.S. or the rest of the world, I would take the rest of the world, as much
0:40:11 as I love the U.S. as impressive as it is, its AI, all that.
0:40:17 And so the way that translates into my investment strategy is slowly, but surely, I am divesting
0:40:21 out of U.S. assets into foreign assets.
0:40:24 And then the crossover is that I love Latin American culture.
0:40:26 I spent a lot of time in Brazil.
0:40:27 I love Mexico.
0:40:32 Colombia is the third-largest economy in South America.
0:40:34 And the Colombian economy is growing.
0:40:38 It popped 7% post-COVID in 2021.
0:40:41 It was up 2.2% last year.
0:40:45 It’s supposed to be up to high twos this year, 3% in 2025.
0:40:50 And also, just quite frankly, it’s just a beautiful country, Cartagena Medellin.
0:40:55 The idea to be part of an investment group, where they seem like good citizens, it’s
0:41:00 a good team that could be, I think, a great team to be part of an owner’s group that really
0:41:07 seems to care about the community and seem like good guys and a chance to spend more
0:41:11 time in Latin America, specifically in Colombia, check, check, check.
0:41:13 So this is super exciting for me.
0:41:16 And also, I think over the medium and the long term, we’re going to make money here.
0:41:21 I think this is a good team in a great country, in a growing sport with an owner’s group
0:41:25 that’ll bring a lot of attention and thoughtful management to the club.
0:41:30 At least that’s how I’m deluding myself into buying a Ferrari right now, basically.
0:41:33 Well, no, football’s growing massively.
0:41:39 I mean, the MLS, you just look at the MLS, the falsest growing sports league in America.
0:41:43 El Madrid, just a couple of weeks ago, they became the first football club in history
0:41:46 to pass a billion euros in annual revenue.
0:41:48 I mean, this is a massively growing sport.
0:41:54 But in terms of how this, how you come about this, like, how did this actually land on
0:41:55 your desk?
0:41:59 Like you said, you meet this Jonah Hill Moneyball-like character.
0:42:02 How does he know that you’re interested in doing this?
0:42:06 How does he get connected to Avalon Goria and all of these celebrities?
0:42:09 Like, how does this tangibly happen?
0:42:16 I think I was their diversity hire, I think that basically, so this group had no problem
0:42:20 raising the money and they wanted people that would either add value or they didn’t need
0:42:21 that much capital.
0:42:26 I think they wanted people who had, would raise awareness for the club, who seemed to
0:42:29 be good stakeholders or good fiduciaries.
0:42:34 And because I had met the people organizing the group and because I had met Rob, I think
0:42:37 they thought, what the hell, let that crazy professor in.
0:42:41 And they, you know, I know a decent amount about branding.
0:42:46 I’d like to think I’m a good fiduciary, I’ve served on a lot of boards and I’m, you know,
0:42:49 the world knows I love taking my sons to see the beautiful games, so maybe that’ll bring
0:42:52 some attention to the team.
0:42:54 And they know I’m, you know, they know I’ll vote with my feet.
0:42:59 I’m going to go to, chances are in the next 12 months, you’re going to be sitting at Metropolitana
0:43:07 Tech, I think it’s the name of the stadium, with me at, at a, you know, a La Aquidad game.
0:43:12 So I’m, I’m into this, I’m into this stuff and they were nice enough to, were good enough
0:43:13 to let me into the investor group.
0:43:17 So I’m, I’m super excited that it’s, it’s unlike, you know, it’s just weird that all
0:43:19 the moons line up like this.
0:43:22 If it had been a great team in Thailand, I just couldn’t have done it because I wouldn’t
0:43:23 have been able to go to games.
0:43:26 If it had been a great team in the Premier League, I wouldn’t have done it because I
0:43:28 don’t have the money.
0:43:31 And if it had been a great team, you know, at a reasonable cost with a group of people
0:43:33 I didn’t know, I wouldn’t have done it either.
0:43:35 So I’m, this, this was just like,
0:43:38 And the Colombians are just insane about their football.
0:43:41 I mean, these, these matches are going to be absolutely electric.
0:43:42 I can’t wait.
0:43:43 I can’t wait to go.
0:43:45 The stadium sold out the Colombian people.
0:43:46 I don’t know if you spend any time in Colombia.
0:43:51 It is a beautiful country and it’s sort of a remarkable turnaround.
0:43:56 So gosh, an excuse to spend time in Colombia in the auspices of a football.
0:43:57 A great investment.
0:43:59 I mean, be like investing in a strip club.
0:44:01 I mean, how can you say no?
0:44:02 Exactly.
0:44:03 That can be a good investment.
0:44:07 Talk about being a part of one of these like celebrity investor consortiums because we
0:44:12 keep on seeing these show up in different investments, usually in like consumer products,
0:44:14 CPG space is a big thing.
0:44:17 And I’m always a little bit skeptical of these celebrity investments.
0:44:20 It feels like they generate a ton of heat.
0:44:25 They make all these headlines and then they kind of like fade out into irrelevant.
0:44:30 I mean, I think of like, you know, the Kim Kardashian type investments, all of those celebrity
0:44:36 SPACs that we were seeing, like what is the actual benefit of having all of these A-listers
0:44:38 in this group?
0:44:39 Why would they target it specifically?
0:44:44 Well, I mean, the reality is we live in an attention economy and I would imagine the
0:44:49 Wrexham franchise is probably going up 10 or 20 fold in value, even if they brought
0:44:53 together really thoughtful fiduciaries and investors and people interested in football.
0:44:56 I don’t think they would have registered those sort of gains without the attention that Ryan
0:44:59 and Rob brought to the franchise.
0:45:06 So this group that includes a lot of celebrities and yours truly, I mean, and as in not, but
0:45:10 it’s also the group includes some people who really understand football and understand
0:45:11 operations.
0:45:17 So the funny thing about the announcements was I’m the and guy.
0:45:20 It would be like Ryan, you’d have a picture of Ryan and Rob.
0:45:23 Then it would say Ann Kate Upton and Justin Berlender.
0:45:26 Her husband is an amazing athlete himself.
0:45:28 And then the Eva Longoria.
0:45:31 And then it would say also joining the group.
0:45:32 I was the Ann.
0:45:33 In the seventh paragraph.
0:45:34 Yeah.
0:45:39 Almost like, I don’t know, again, I’m their DUI hire is the way I would describe me.
0:45:40 Yeah.
0:45:44 It’s, but I’m super excited about it, but I feel like it could be one of those things
0:45:49 where the happiest days in a boat owners life is when they buy it and sell it.
0:45:50 So we’ll see.
0:45:54 But right now I’m in joining the honeymoon phase and I’m planning a bunch of trips to
0:45:55 Columbia.
0:45:56 I personally cannot wait.
0:45:58 I’m going to have to do some live podcasts there.
0:46:01 And I think we should do some football themed podcast there as well, or it’s just you and
0:46:02 I.
0:46:03 100% my friend.
0:46:04 Shooting the show.
0:46:05 Like we did.
0:46:06 It’ll be amazing.
0:46:07 We are taking this team to the top.
0:46:11 Literally, we’re going to win the Copa, Columbia Cup, we’re going to win the league for the
0:46:12 first time.
0:46:13 That’s right.
0:46:14 And we’re just, we’re going to have a ton of fun.
0:46:18 And we’re going to try and add some, bring some awareness to a great city, a great country
0:46:19 and hopefully a great club.
0:46:20 Absolutely.
0:46:23 And we need to make friends with all of the most powerful people in football before the
0:46:24 World Cup.
0:46:26 That’s a really important thing here.
0:46:28 So we need to become very influential.
0:46:34 And then when 2026 comes, we need to have, you know, access to the box and, you know,
0:46:35 all the good stuff that’s going to happen in 2026.
0:46:36 Oh yeah.
0:46:40 I’m clearly getting access to the finals of the World Cup when I say I’m a minority
0:46:45 owner just behind Kate Upton and the second biggest football club in Bogota.
0:46:46 Yeah.
0:46:48 We’re, we’re a shoe in for the World Cup.
0:46:49 Let me go this way.
0:46:54 If I were you, I’d kiss the asses and product manager at AVM Bev or McDonald’s or sponsor
0:46:55 if you really want to get to the World Cup.
0:46:57 I’m not sure I’m your in.
0:47:00 You’re all, you’re all good and lock we dod.
0:47:04 You are, you’re at some point, at some point you can wave at me in the owner’s box and
0:47:05 I’m not sure I can get you in.
0:47:07 I’m not sure I can get you in.
0:47:12 But yeah, World Cup, I’m not sure, I’m not sure we’re, I’m not sure we’re money good
0:47:13 there.
0:47:14 Okay.
0:47:15 Well, we’ll, we’ll work on it.
0:47:16 Let’s take a look at the wig head.
0:47:20 We’ll see data on the personal consumption expenditures index for December.
0:47:25 And we’ll also see earnings from Microsoft, Metta, Tesla and Apple, huge earnings week
0:47:26 coming up.
0:47:28 Scott, do you have any predictions for us?
0:47:33 I think the markets or equities are moving on two things.
0:47:35 One is interesting, one is a shame.
0:47:41 The thing that’s interesting is what we referenced before and that is attention and perception
0:47:43 as opposed to underlying fundamentals.
0:47:47 And it’s always been perception and the level of attention something has is always played
0:47:52 a role, but it’s playing an increasingly outsized role as evidenced by the CEO Palantir going
0:47:57 on Bill Maher and live streams of earnings calls, you know, CEOs are figuring out, you
0:48:00 just want to be in people’s brains as much as possible.
0:48:05 And then, you know, even if you’re a manufacturing company, just use the term AI over and over
0:48:08 and your shares will pop two or 3% instead of flat.
0:48:14 The second thing is proximity to power, which is kind of the fundamental metric for a kleptocracy.
0:48:18 And that’s a shame, but that’s increasingly important, especially over the last, I don’t
0:48:23 know, 10 or 11 days as evidenced by one person’s wealth going up $140 billion, despite the fact
0:48:29 that he had, you know, his firms have not registered any tangible improvement, but the assumption
0:48:33 that we are now the market says we’re in a kleptocracy and being close to power will
0:48:34 help your companies.
0:48:39 Anyways, the chocolate and peanut butter this right now, I believe is Oracle.
0:48:43 And that is they are the perception is they’re getting closer and closer to the center or
0:48:47 the epicenter of where the greatest value creation in history has probably been.
0:48:48 And that is AI.
0:48:53 And then being invited into the Stargate group and being a key or a key pillar of it sort
0:48:57 of says they’re at now the kind of the adult table or the adults table, whereas they were
0:49:01 sort of hanging around the hoop, but now they’re, they’re in the center of AI.
0:49:06 And I think the marketplace were small possibly that in addition, Larry Ellison is very close
0:49:10 to Trump see above kleptocracy.
0:49:14 And if you look at Oracle, it trades at about eight time sales, Microsoft’s about 13 and
0:49:16 videos, I think in the low 20s.
0:49:21 And then you have your open AI is at 40 and your Anthropics at 60.
0:49:26 So I think that you’re going to see this kind of nitro and glycerin explosion in the multiple
0:49:27 on Oracle.
0:49:32 I think it’s earnings will probably improve, but more than that, it’ll register multiple
0:49:38 expansion based on its proximity to power and to the epicenter of AI.
0:49:43 So I believe or the prediction is simply put that Oracle is going to outperform the market
0:49:45 over the next six to 12 months.
0:49:48 Do you think it’ll be considered part of big tech by the end of the year?
0:49:51 I mean, it’s around a half a trillion dollars right now.
0:49:57 The big tech company is all hovering around two trillion or at least they’re above a trillion
0:49:58 dollars market cap.
0:50:01 Do you think it could reach big tech status?
0:50:07 It’ll either replace or it might become the 11th of the Magnificent 10, right?
0:50:09 That it’s going to join, that’s exactly the right analogy.
0:50:15 I think it’s a boy to join the executive washroom of tech companies and valuations.
0:50:22 I think it’s a great company, great management, and they have strong cash flows plus with
0:50:28 their existing database business and they’re going to get some, I don’t know, some sales
0:50:33 on that ship with all this AI and attention they’re about to get.
0:50:37 This episode was produced by Claire Miller and engineered by Benjamin Spencer.
0:50:41 Our associate producer is Allison Weiss, Mia Silverio is our research lead, Jessica
0:50:45 Lange is our research associate, Drew Burris is our technical director, and Catherine Dillon
0:50:47 is our executive producer.
0:50:50 Thank you for listening to ProfG Markets from the Vox Media Podcast Network.
0:50:56 Join us on Thursday for a conversation with Robert Armstrong, only on ProfG Markets.
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Scott and Ed open the show by discussing Netflix’s fourth quarter earnings, Johnson and Johnson’s latest earnings call, and potential TikTok bidders. Then Scott breaks down the new Stargate initiative, explaining how it served as a strategic branding victory for the Trump administration and will likely enhance Oracle’s influence within the tech industry. Ed offers his thoughts on what the project reveals about the evolving AI industry. Finally, Scott discusses his stake in a Colombian soccer team, explaining how the deal came about and how it aligns with his broader investment strategy.
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