Chapter 1: What is the main topic discussed in this episode?
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That is Hostinger.com slash TheProfG. Promo code TheProfG for an extra 20% off. Support for this show comes from Odoo. And the best part? Odoo replaces multiple expensive platforms for a fraction of the cost. That's why over thousands of businesses have made the switch. So why not you? Try Odoo for free at odoo.com. That's O-D-O-O dot com. Dad joke or dick joke? Dad joke. I had a dad joke.
That's my vote personally. What does a German say here in the South by Southwest? What is it? Howdy? Thank you. So on my wedding night, a new bride says to me, I've got some really good and really bad news for you. And I said, okay. She said, oh my God, your gift is so much bigger than your brother's. All right. Live from the Vox Media podcast stage at South by Southwest.
Welcome to Prompting Markets, everyone. The worst of it is over. Thank God. How are you doing, Scott? I'm a little insecure because you look very handsome, the whole blue linen thing. I don't like this. We did a tour around the lobby. And of course, everyone's like, hi, Ed. And like asking if Ed's got a girlfriend, all these parents showing up. It's awful. By the way, I got really excited.
There's a big line. I'm like, oh, that's so exciting. Then I found out it's for the audacity of joy next door. Folks, no one's coming to save you. This whole therapy thing, they're the new supplements. Let me just summarize the audacity of joy. It's THC and Netflix. That's joy. All right. And let me summarize 20 years of therapy. Your parents did their best. Just don't be such fucking jerks, too.
No one's coming to save you. And everything you think is trauma, there's a word for it. It's called life. Back to you, Ed. Impeccable start. We're making fun of other shows. We're feeling depressed. I love it. Okay. So today, we're discussing some slightly heavy news because we have to. Today, we're discussing the Iran war's impact on global markets.
We're also discussing the future of AI according to the leaders of AI. And we will also have some time for some audience questions at the end. But first, Scott, let's get into the episode. Good enough. All right. Today's number... How am I doing so far? Today's number 15. That's how many venomous snake species live in Texas. Wow. Then I should have done the dick joke.
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Chapter 2: How is the war with Iran impacting global markets?
I think that there are issues, as I mentioned, between our relationships with a lot of these regions and our dependence on their investment. But as it stands, you're right. I mean, the U.S. is the most protected, and that is what the markets are telling us. But some of it also comes down to perception, and that is life isn't about what happens to you. It's how you respond to what happens to you.
And remember Masayoshi Son, the CEO of SoftBank, still the CEO, he had kind of an interesting statement. He said, would you rather be in a fight with someone who's really smart, or who should you be more scared of, someone who's really smart or someone who's really crazy? And his point was you should be scared of someone who's really crazy.
And that was somehow a justification for making crazy big investments. I'm sorry I made the lead there. But the reality is in America, we're fairly sensitive. You know, the largest disruption or the biggest calls to customer service in 911 was when at the end of the season ending series of The Sopranos and it went black and people thought their cable was out.
We have what seems like a tragedy to us is on a different level and also Europe. Europe's being invaded right now. And essentially no European nation has even come close to putting a boot on the ground in Ukraine. We have lost, and this is a tragedy. I don't mean to in any way diminish it. We've lost 12 or 14 service people so far. Russia's losing a thousand people a day.
We had lost 58,000 people in Vietnam. They had lost a million. We pulled out. We lost 400,000 people in World War II. Russia lost 20 million. Our tolerance for pain is very, very low. And so we will respond. I mean, to a certain extent, Russia's core competence is their ability to endure suffering. I mean, that is their core competence.
Can you imagine us entering a war and losing 1.2 million people and continuing to fight the war? We just wouldn't do it. So the vulnerability is that our perception of what is difficult or tough or damage is much, our bar for pain, our tolerance for pain is is what a man's is versus what a woman's is, right?
Women have to endure childbirth and menstruation, so they have a much higher tolerance for pain. This is scientific. It's not an opinion. Men get a cold and think like, you know, call 911, right? So that America's men, our tolerance for pain is very, very low. Now, how that might trickle down economically is because of income inequality.
The top 10% of income-earning households now control 50% of the consumer economy. We're now a consumer economy. Two-thirds of our GDP is consumer-led. So if the very wealthy all of a sudden start seeing, you know, a level of pain that we are just not used to, which is much lower than the level of pain most countries endure every year, you could see a significant drawdown.
I personally, I never want to hate, I never want to see the markets go down. But the two worst indices in history are the Dow and the NASDAQ, because they create this false comfort that we're doing okay when they go up. The Dow and the NASDAQ are effectively a proxy for how the rich are doing. And spoiler alert, they're doing really well.
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Chapter 3: What are the potential shifts in investment strategies due to the Iran conflict?
So the catastrophizing is one, a form of narcissism in my viewpoint. It is not helpful to say you've created something that could destroy the world, You have no tips. You can't tell us what that peril is or how you can uncode it. And also it's sort of a way of saying you should invest in my company at an $800 billion valuation because this is so scary and so powerful. Why not make money?
So let me get back to the technology that will be big. I get invited now, first time in my life, right? Ed gets invited to them. I've just started getting invited to these fancy, very fancy dinners and events. And I got invited last night. And I'm going to name drop because I'm desperate for your affirmation. And I saw and talked to Michael Dell and Mark Cuban.
They look like a version of themselves that the old version could eat. They have lost so much weight. These guys... And my favorite is like, I come up, you know me, I'm very delicate and very nuanced and very social. And I'm like... I'm like, which GLP-1? And they're all so full of shit. They're like, no, I'm just playing Padel every day. And oh yeah, right. Padel and you lost 70 pounds.
The agonists, the bottom line is the investment strategy. I'm going long lily. I think GLP-1 is a much more important technology than AI. And I've said this for a while. Talk to someone who uses AI every day in their job and talk to someone who's on a GLP-1 drug and ask them what's having a bigger impact on your life.
I think GLP-1 is gonna be more transformative to our economy and more important for the world than AI. And almost anyone with an IQ over 90 totally disagrees with me. So I'm not suggesting I have a monopoly on this, but when I look at what GLP-1 is doing, and the thing about GLP-1 is every new thing we find out about it, it's a good thing. Oh, it can help with social media addiction.
Oh, it brings down your blood pressure. And every new thing we're finding out about AI, it's like, oh, shit. Anyways, bringing this back to the markets, AI, dramatically overvalued. And the technology can outlive the market capitalization. And that is the value may go way down and the technology will survive. I still think it's going to be huge.
I think it's going to increase productivity, especially in drug discovery. But I would argue from a market standpoint or pure valuation, I think GLP-1 based drugs have much more upside. both from a sociological level and an economic and a shareholder level than AI, which has now turned to AI washing around, firing people and saying it's going to end the world because it's such amazing technology.
At the same time, there is an incentive now for businesses and for business leaders to figure out a way, whether it's because of AI actually right now or not, to figure out a way to lay off a bunch of people. So that's what they're trying to do. And that is what they are doing. We saw Pinterest laid off 1,000 people. Atlassian laid off 1,600 people.
Block, which was formerly Square, they laid off 4,000 people in one go, 40% of the workforce. And I think it is very possible that there is some AI washing going on. At the same time, this is now what they're trying to do. We talked to David Solomon, the CEO of Goldman Sachs, who said, my mission is to keep headcount flat. I do not want to increase headcount at all over the next 10 years.
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Chapter 4: Which countries are emerging as winners and losers in the current market?
the core competence to be successful in life. And that is the ability to cooperate and maintain really strong relationships. So whether or not you fail calculus, which I did three times, 2.27 GPA, true story out of UCLA. College has never been more important. And by the way, the data supports it. College applications are up and we're wasting tuition again, faster than inflation.
So be careful with this narrative that you don't need college. And I just find it such extraordinary bullshit that all the people who claim college doesn't matter, all went to college. So does that to say, now we have to face reality, two thirds of our children are not going to get college degrees. And so we have to make bigger investments in vocational programming.
I think a loss of cultural and economic standing of the American middle-class male is a big problem. And we need to recognize that more women are going to go to college because, quite frankly, once we level the playing field, they're just better at it. And that's wonderful. We should not get in the way of that.
But we also need to realize when you get rid of metal, auto, and wood shop, do you remember that guy in high school? He just wasn't going to go to college. There was a lot of them. Probably smoked a little bit of weed, had the Journey shirt, you know. Is this you?
You know, on the way to school, threw a can of beer at you and called you a name and on the way home invited you in for your first bong load. It's you. Anyways. But this dude could fix your car. Like he knew how to work outdoors. He knew how to make a living. There was an on-ramp for these dudes. Those on-ramps are going away. So I think that's the bigger problem is what do we do?
How do we create more on-ramps to a middle-class lifestyle for people who aren't cut out for college? as opposed to talking about how you don't need college anymore. Trust me on this.
If you have the resources, what I tell people, if you have the resources and a kid who is academically somewhat focused and you have the access to college, it's a really good plan B. Oh, I really fucked up going to Stanford, said no one ever. So some more quotes here. Satya Nadella, CEO of Microsoft, AI is a cognitive amplifier that gives you access to infinite minds.
Sundar Pichai, CEO of Google, he said, quote, AI is one of the most important things humanity is working on. It is more profound than electricity or fire. Is AI more profound than electricity? Buy my stock. That's all they're saying. By the way, things changed 100 years ago. 25% of GDP was firewood. I mean, things change, but these guys are just saying buy my stock.
Well, this is the question is, is AI more profound than electricity and fire? Maybe it is. More fundamentally, will it change the world for the better? Is this something that we'll ultimately, we'll look back on and say that was the right thing to do? Well, that's a bigger, that's obviously a huge question that a lot of people will stare at their navel around.
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