Into the Impossible With Brian Keating - What's The Real Value of Your Degree? Aswath Damodaran

Episode Date: March 9, 2026

 Please join my mailing list here 👉 https://briankeating.com/list to win a meteorite 💥 Aswath Damodaran joins Brian Keating to argue that markets, universities, and financial models are all suffering the same disease — mistaking mechanical processes for genuine thinking — and explains why Nobel economists aren't billionaires, why academia is the most deserving target for disruption, and why every major asset class is now overpriced with nowhere left to hide. 00:00 Intro 00:01:37 Why Nobel Economists Aren't Billionaires 00:06:08 Universities Have Completely Lost the Plot 00:07:43 95% of Academic Research Is Worthless 00:13:05 The University Is a Sticky Business — But Cracks Are Forming 00:40:00 ChatGPT Already Does What Bankers Charge Millions For 00:46:43 The Most Dangerous Number in Finance 00:52:35 There Is No Safe Place Left to Put Your Money 00:55:48 When Every Asset Is Overpriced, Buy What You Love 01:00:22 We Are Losing Our Ability to Think 01:01:30 Markets Are Smarter Than Experts — Every Single Time  ➡️ Follow Aswath Damodaran  🌐 Website: https://pages.stern.nyu.edu/~adamodar/  📚 The Little Book of Valuation: https://pages.stern.nyu.edu/~adamodar/  📝 Musings on Markets (Substack): https://aswathdamodaran.substack.com Join this channel to get access to perks like monthly Office Hours: https://www.youtube.com/channel/UCmXH_moPhfkqCk6S3b9RWuw/join 📚 Get my books: Think Like a Nobel Prize Winner, with productivity tips from 9 Nobel Prize winners: https://a.co/d/03ezQFu Focus Like a Nobel Prize Winner, with life-changing interviews with 9 Nobel Prizewinners: https://a.co/d/hi50U9U My tell-all cosmic memoir Losing the Nobel Prize: http://amzn.to/2sa5UpA The first-ever audiobook from Galileo: Dialogue Concerning the Two Chief World Systems: Ptolemaic and Copernican https://a.co/d/iZPi9Un Follow me to ask questions of my guests: 🏄‍♂️ Twitter: https://twitter.com/DrBrianKeating 🔔 Subscribe https://www.youtube.com/DrBrianKeating?sub_confirmation=1 📝 Join my mailing list; just click here http://briankeating.com/list ✍️ Detailed Blog posts here: https://briankeating.com/blog 🎙️ Listen on audio-only platforms: https://briankeating.com/podcast #universe #podcast #briankeating #intotheimpossible #science #astronomy #cosmology #cosmicmicrowavebackground #intotheimpossible #briankeating Learn more about your ad choices. Visit megaphone.fm/adchoices

universities, they've entirely lost their way. 95% of research, if it never happened, nobody would miss it. It doesn't change one aorta. The reason this scam that we call university education has been able to raise tuition, six, seven, eight percent a year is because you had a federal financing system that keeps the money machine going. If people actually had to raise the money to pay $100,000, it's almost impossible to get to that. with traditional loans.

Why aren't Nobel Prize-winning economists billionaires? They understand markets better than you. Why don't they dominate? Today's talk isn't about timing trades or chasing bubbles. It's about what happens when data, models, and human trust collides. And what science and academia would and should do differently. Today's guest, Professor Aswat de Motrin, one of the most renowned teachers, educators,

and thinkers about money, markets, and psychologists. joins us to talk about the fraying trust in institutions, bubbles, tariffs, downgrades, shutdowns, and threats to central bank independence, and will happen in the distant future when the convergence of AI, education, and markets come to a head. What if economics behave like physics, error bars, models, risk, hidden variables, and what we should learn as professors, scientists, and anyone who's trying to thrive in this uncertain economy should know.

So join us as we dive deep. as we dive deep into the impossible with my guest, Professor Oswath the Motrin. Let's go. My question that for economists is always the same. I always start with the same one. Why aren't all Nobel Prize winning economists billionaires, Oswald? Because that's not, remember in economics, the endgame is to maximize the attorney, not wealth.

You know, utility basically is happiness, satisfaction, whatever you want to define it. If you get that from wealth, you can go out and maximize wealth. So the two converge. we maximize you? I mean, I've been looking after. The reason I'm on sabbatical this year is I'm looking after my granddaughter who was born in May of 2025. And my daughter is a school teacher, so she had to go back to work at the end of August. And I've been looking after the baby since then, and she's nine months old. And I'll be quite honest, I've derived more utility from this than being a hedge fund manager and managing $15 billion. It's not true that in economics,

maximizing uterity is equivalent to going out and make billions. For some people, it might be. That's not your convergence. You know, you're going to maximize your dirty doing whatever makes you happy. And what does besides, you know, grandchildren and obviously, you know, grandchildren and grandparents get along because they share a common enemy. But in reality, you know, not all the listeners will have that blessing that you have. I have children. I don't yet have grandchildren. Hopefully someday I will. I guess the question is, yeah, I mean, is this, is there no real secret? There's internet gurus who say things like, if you're so smart, you know, how come you're not rich? If you're so smart, how come you're not happy? How do you converge on

some universal definition as a scientist? I know what an electron is. I know what the Schrodinger equation says about it. But there's no seemingly guiding unifying principle or is there, maybe I'm wrong. Is there a unifying principle for maximizing utility or even identifying utility or is it all ad hoc? Social and science don't really go together, even though we call it social science. Humanity is not easily pinned down. It's not linear. It's not easy to pick one thing that everybody agrees on. So economics is always a mix of psychology. It's a mix. I mean, we have our theories, our models, but they're never going to work like physics. I mean, you get the inputs right. You're not going to necessarily get the same output every time.

Now, I don't even think of myself as an economist. I'm a teacher who happens to think about markets and business and economics. Now, I'm not an intellectual. I don't, you know, I'm not even, I don't call myself an academic or research or a professor. I'm a teacher. I've always been a teacher. I got my PhD because I wanted to have a teaching life, not a research life. If you have any academics in your audience, what I'm going to say next month,

I'm short of them. I haven't submitted a paper for publication. in 25 years and I don't intend to. I have no desire to write papers that 50 people read and chat about it in an echo chamber when there are potentially tens of thousands of people I can reach who are practitioners who I can help on a day-to-day basis. I'm not a deep thinker. I'm a dabbler. And for me, what gives me joy is being curious and trying to find an answer. And once I find an answer, I move on. I'm not interested in digging really deep and spending five years on a topic when I've lost interest in it after two weeks. When we think about passion and, you know,

creativity and so forth and following your passion, obviously, yeah, you say that you're a teacher first. You've won numerous teaching awards at arguably the top business school in the world, if not in America. We never get taught, you know, these things. We're kind of like led into it as professors. And there are a lot of academicians who listen to this podcast. So don't be afraid to talk about your department chair and the most grotesque. No, no, we won't do that. But at least in my field, we don't teach scientists. We don't, we say you're brilliant. You can get grants. You have great ideas. You do have a high H index, which, by the way, was invented here at UCSD. But, you know, we don't say like, you know, you're a great teacher.

In fact, Isidore a rabbi, the famous Nobel Prize winner invented the molecular beam, you know, technology. He said, you're hired as a professor to do research, to discover new things, and if you're a gentleman or gentle lady, you will teach, you know, to a bare minimum standards. What is your philosophy of teaching? You obviously think about it a lot, but do you train for it? Do you actually, you know, do anything to develop this, or is it just preternaturally a gift that you have? I'm going to give you my cynical view of universities. I think they've entirely lost their way. I mean, if you think about a university as an outsider, and I asked you what the mission of the university is, you'd say education. And if I asked you who, if I asked you who your prime

audiences, it should be undergraduates. They're the ones who feed the university. But you teach at a research university like I do. And I think about the ordering of who matters at a research university. At the very top of the heap, our tenured academic faculty. They basically run the I mean, let's face it, I tell people, what other profession is there in the universe where you teach four to five hours a week, the rest of the week, especially after you get tenure is yours, to do whatever you want. You get every seventh year off and every summer off, and people complain about how difficult academia is. Yeah, I say it's the hardest three hour a week job in the world. Exactly. But I think in a sense, we lost that end game. We charge obscene amounts of money for undergraduate education.

We treat our undergraduates like trash across research universities. A third to a half of all classes taught at university now, taught by adjuncts. We're teaching machines who go around teaching eight, nine, ten classes across three universities, filling in spaces because we're all too busy doing our research. And the old saying of, you know, published but perished anyway comes in, to, because really, most of the research, I mean, you talk to Nobel Prize winners. They make a difference. But the truth is, 95% of research, if it never happened, nobody would miss it.

It doesn't change one word one a iota. So it's a cynical view of research, but this has become a game where we churn out papers that nobody reads. And I think it reflects the fact that as disciplines age, they become flabby. I mean, I don't know enough about physics, but I mean, I think about finance. Finance is about 70 years old as a discipline. When you started finance as a discipline, now Harry Markowitz at Princeton and the University of Chicago, people are asking the big questions. What is risk? How do markets work? Today, if you pick up a finance journal, it's full of articles. First,

you don't even recognize the title. It's inside baseball with acronyms. that nobody outside the echo chamber and asking questions about things that nobody cares what the answer is. But that's how you get published. You ask narrower and narrower questions because you ask big questions. There are too many loose ends

and some reviewer somewhere is going to say this paper is not ready. So I think in many ways we've used research as an excuse for if we can't pay enough attention to our students. So to me, as I said, I come from a family of teachers. My wife is a fifth grade teacher. My daughter teaches second grade is special at kids. My daughter-in-law teaches, you know, chemistry to high schoolers. And they have to go through

more preparation to teach than any PhD student has to, before they go in front of the classroom. I just got lucky. First, I got lucky because of why I came for a PhD. I came for a PhD, and I tell people this quite openly because I was a TA when I was doing my MBA. My plan was to go work for an investment bank, make a lot of money, but I was a TA for an accounting class and two sessions in, basically, I'm not religious, but it's a godshot. Basically, a moment of grace when I said, this is what I want to do with the rest of my life, not teach accounting, but teach. I went up to the seventh floor at UCLA, which is where I was teaching. And I said, I want to get a PhD. And I was quite honest. I said, I'm not doing a PhD because I want to write a lot of papers and get

published, I want to do a PhD because it'll give me a teaching life where I can truly enjoy teaching without getting burnt out. So I came in for the right reasons. I was lucky enough to have the capacity to teach without really trying to art. I prepared for my classes, but it came easily. I mean, I tell people every good teacher is a repressed actor, which is you have an audience, and I think the great thing about being a teacher is instead of your audience rating you, you rate your audience. You give them a grade. And I said, who can ask for much more? So I just got lucky, but I think you're absolutely right. The fact that our universities are staffed with PhDs who don't ever teach until that very first session they're put in front of a classroom is criminal.

I think we need to change it and we need to create a focus where if you're going to get a PhD, it can't just be for research. It has to be because you have to educate other people because that's what's paying the bills. That's what keeps the university running. Yeah, that's similar to the motivation, you know, why I started the podcast. I feel like, yes, the undergraduates, you know, pay our salaries to a large extent. But beyond that, the American taxpayers pay my salary. And so I talked to my colleagues, I say, well, why don't you explain things in simple terms that your employer can understand? Because, you know, Oswath, if we had real jobs, you know, we are working in instruction or, you know,

even in the law firm or something like that. And we told our boss, we do something very specialized and we use a jargon, a lingo that you can't understand Mr. or Mrs. employer. We'd be, you know, you know what, can, in a couple of hours. And yet we say that to the, oh, you can't understand

the origin of the universe. So, you know, I'm not, and I'm not going to learn the skills to communicate to you how it was actually done in terms you can understand as my employer. I feel like that's one of the main risks, you know, scientists are complaining a lot about Trump, you know,

cutting budgets and stuff. And there's a lot of validity to that, Oswath. But we bear a large share of the blame that we cloister ourselves away in the jargon like you just described and pride ourselves in our age indices and so forth while we turn a blind eye to tuition. You know, we have a food bank on campus here, Oswaf. We have students that are food insecure here. You know, it's crazy. I thought COVID would be the end of the modern university. The fact that it survived, And even the most prestigious universities, like Harvard, NYU, and, you know, UCSD, I thought they would never agree to this. Aswell, I was wearing a mask. Students were wearing a mask.

First of all, I was doing Zoom. And that sucks. Me too. For six months. And then it was in a mask. And I couldn't breathe and they couldn't breathe. I thought that would be the end of it. We're just going to have, like, some new models going to come about.

And then it didn't. It got more entrenched. I'm worried it's here to stay. And with AI, I see no dimensual. munution in the worship of the college degree. And I think, so who's that fault here? What do we do about it, Oswald? I think a lot about stickiness and businesses. I'm a pragmatism. When I think about businesses, what makes for a successful business is stickiness. Stickness in the sense of your customers stay with you. They don't go to comparators, even if the comparators are offering.

If you think of the university as a business, it's a very sticky business. It's sticky business. It's sticky business is because it's grounded in a century of us telling people if you don't get a four-year degree, you really are not qualified to get a job. If you're not qualified to get a job, you'll be essentially never somebody who makes much of your life. That was drained into our grandparents, our parents, so in a sense, this stickiness doesn't go away. I remember when Coursera first came into being 20 years ago, the online courses, and they said, this is the end of universities. You can now take MIT, Harvard. At the time, you know, I actually wrote a post on my blog saying, I don't think people get why people go to university. They don't go to university. You get a

collection of classes. If you think about the university is a bundle of things that you offer kids. The first thing most critical is they're a safe place, at least a safer place for you to send your kids, especially if they're boys, between the ages of 18 and 20, you want them something. You want them some place where they can do stupid things and get away with it, and a university campus happens to be one of those places. So that first is a place of safety. Second is, there are the classes. Third is, the impetus that you have to go to class comes from the fact that you have a roommate who wakes up at eight since you have a class, because what we discovered with Coursera was people started classes, but I think they had a 3% completion rate. Human beings are incapable

of carrying through these resolutions. They have, oh, I want to take a class. class in physics. But after the second session, this is so much work I'm dropping out. So universities kind of create that discipline. There's also what you learn from each other in a classroom. I teach a lot of online classes, but I love teaching in person because you can see that connection happening across the classroom that you can never get even with the best technology. But there's more stuff, right? You also get an entertainment part of the package, right? You go to Notre Dame. Let's face it, those 12 football games. a part of the season are a big part. So I basically what I did was I unbundled the university

and I wrote and I actually did a presentation called the Barbarians are at the gate. And I talked about how each piece is being chiseled away. So you have online courses, you have LinkedIn now coming in for the network. Because it used to be that you went to a university to get that network of I hung out with people. And with each piece, it's a little chiseling away each year. I don't think disruption here is going to be like the disruption you saw with brick and mortar retail. It's going to be gradual. It's going to eat away. It's going to come first for the lowest hanging fruit, right? The community colleges. And it's going to come after classes where faculty deliver purely content. I mean, if it's a delivery mechanism

for content, you could look over your shoulder if you're 35, 40 years old because it's not that the university will go away, they'll just replace you with a cheaper old turtle. I mean, my son went to Yale, and he took the computer science class at the Harvard Yale online computer. It's a great class, and it was a class with exams and grades. So I think that disruption will is happening, and the universities don't even know what's happening because it's coming from, you know, it's coming in small pieces. And it will, the lower level university first, but it's coming for all of us. There's no more deserving target for disruption than universities are. I mean, for the last 20 years, I've tried to disrupt myself. What I mean by that is every one of

my classes is what I do. I take, I record every class. I'm sure UCS is the same way. I make it public. I put all the slides online, all the content, all the recordings. I make them available. You can, and my end game is to see how much I can put away online where people would stop coming to class. What it does, it makes me work harder. I do something in the classroom. I would call it magic, but where people want to come to class, even though they can get every piece of content in the class, sitting in their dorm rooms or in Florida, for all I know, some other destination. Right. And I think that's an exercise we have to go through to kind of think about, hey, the content is out there.

What are we delivering in the classroom that makes people want to come to the classroom? Because I've never taken attendance in my class because the only way I can get people to come to class is to take attendance. I've lost the script on this one. Well, let me just push back with love and respect. Being venal for a second. I mean, how would you know you've succeeded? Yes, there'll be more people there. But if someone's watching in Florida, like you said, or San Diego here, you won't know.

And the university and the tuition and the students there, what's speaking venally now? What benefit is it to them? I have zero loyalty to NYU. I've been open about it. But that's because you could get a job tomorrow at UCSD. It's not even that. I mean, I know they make in, I know exactly how much money they make of my classes. I teach in an amphitheater.

There are 400 people in my class. I teach three sections of the class. That's my entire teaching law. That's 1,200 people. I know exactly how much NYU charges per course. They're making. So I can add the millions there. I put all my stuff online, talked for free,

by 10 years ago, NYU came in and said, can you make a certificate class for us? And I said, I will on one condition, which is I continue to offer my online classes for free on my webpage, because if your condition for creating a certificate class is I have to take stuff online, I'm not doing it. So I actually explicitly made that part of my contract on doing the certificate classes,

is I would give away my material for free with full lectures online. They could still come to NYU. What they would get then with they wouldn't get in an online class is that certification. For many people, that still matters, no, because they have to go to an employer and say, this is what I have. This is part of my quid core pro is I'll make you the money you want to make of me. but I'm going to do my own thing. And if you don't want that, then the entire package walks away.

And if you're okay with that, that's okay. You know, one piece of advice I've always given my kids is try to aspire to have a job you don't need, that you can always walk away from. I call this the option to abandon it because it gives you the freedom to speak your mind in a way that makes you a more valuable employee. So I think the fact that I have that option, to abandon. Makes me a more valuable employee to Stern. I don't censor myself. I say, what's on my mind? And if people are upset, they're upset. And I say, look, you know, do whatever you need to do,

but this is who I am. I know I'm incredibly lucky to be in that position. But I'm going to take the advantages that come with that position and exploit it to maximize my utility, which is that it makes me happy. When I teach my class at Stern every year, 100,000 people take it online. and I can see them on YouTube. I can see how many people watch it. 100,000 people take it online, and I'm glad I'm able to resource 100,000 people because most of them will never be able to get to NYU.

An equity research analyst in Ghana making $100 a month, there's zero chance he will make to NYU. I'm glad that he gets a chance to take my class online. And I'm glad I'm in a position to be able to do it. I mean, if you're a younger faculty member, you might not be able to push for this guy, of freedom. But that's what you want to aspire for, to reach a point where you do essentially what you want to do. And you're open about it. I don't do it. You know, it's not secret.

Everybody knows I do it. And I tell them I'm doing it. This is essentially the bargain that I've reached with NYU that I hope that other people get the power to reach as well. So in a few minutes, we're going to do what you're never supposed to do, which is to judge a book by its cover and the title and the cover art, which even I think I could figure out. But Oswath, before we do that, there's an app that comes with this book. It's a free app. Most of the stuff you do, maybe that explains why you're not a billionaire. You give away too much for free, but it obviously brings you intangible wealth that is impossible to measure. Okay, so I want to go through this app, but I want to apply it. Instead of, I was thinking,

oh, let's go over Qualcomm, you know, company that built UCSD, perhaps, engineering school, at least, or Petco, which, you know, the Padres are so beholden to, but I don't want to do that. I want to say, could we value a university? Could we look at the university structure? Let's go through a public university like UCSD. Let's go through a top private university like NYU. Do they differ in whack? Do they differ in APV?

Is there a dividend growth metric? What discount to cash flow, where cash flow is prestige, power, influence on government, on policy? What's going to happen in the age of AI? Does this make sense? Can we do that? Let's start with an easier. example. In Brazil and India, much of the university model is actually business run. It's a for-profit. In many ways, it's a more honest model, right? Basically, for-profit, you try to maximize your tuition

revenue, you try to minimize costs, you try to make the difference. I think this facade that universities have of being non-profit gives them an excuse to do whatever they want and get away with it. I mean, I ask people, have you ever heard of a university run a surplus? I never have. No matter how much money they raise, there are always a hundred million dollars below. And then they go to, you know, donors and they're below. So there's something wrong with the system. And it's not just universities.

It's private schools. I mean, this is system-wide. And when something is system-wide and every institution in the system has this problem, there's a structural problem. The structural problem is universities basically, because they call themselves non-profit, feel that they need to spend every dollar they come in. That not spending it is viewed as a weakness. Departments are given the budget. Your objective is to spend the entire budget.

If you run below, you know that somebody else is going to win out. See, entire system is structured around spending money. So if you ask me to, how much would I pay for a university as a business? My answer is, given how university I run, and given, even the constraints I would have to buy into, which is a tenure system of people teach only three classes and bad teachers with tenure stay on for the rest of their lives. That's like buying a government company where I'm bound by all the contracts and the constraints. I'm going to say you got to pay me to take these off your hands. Is there a societal value from doing this?

We could argue that there is, that education, but then that has to be a mission, right? If you mission is research and education is a side product, then the societal benefit that you're delivering has to come entirely from research. Maybe in sciences, there can be an argument that there is that societal value. That, you know, we've outsourced in the U.S. basic research to universities because companies would not do it. It's not, the profits are too far out. And I think there's a good argument to be made that science and the STEM departments at universities, have a societal benefit that comes from basic research. I'm not sure you can extend their argument in social sciences

because there's no basic research. This is really, you know, naval gazing carried to the nth degree. So I can make an argument for the physics and the chemistry and the departments that produce the kind of stuff that businesses are built on. Let's face it, all the great tech companies were built on research, probably done at Stanford or MIT or at UCSD in a computer science department,

by a professor got paid barely, barely, you know, what living wages would demand, but you got no trillion-dollar universities and that they should therefore be paying a royalty back to the system, which you then find its way into basic research. So there's a segment of the university system

where I'm willing to concede that there's a social benefit where you might ask, how much should society pay to keep that basic research going? Like a utility. But the rest of the system, I'm sorry, but if you're not educating students, I don't see the end game for a history,

a literature, and economics, a social science department. Education has to be front and center. One thing, you know, that's kind of on my mind lately just because of the news. As I said before, I thought, you know, COVID would be the end of the, at least the current instantiation of modern academia. Then I thought AI or COSERA or online Khan Academy, nope, that didn't do it. Now I look at some something like the Epstein files. And you see the influence that he carried, not just with corrupt moral individuals, but with the highest level of intellectuals, of academicians, of professors from the top universities, from public universities. I should say that I think Arizona State has mentioned more than any other university. But I thought, well, maybe now. That could be the

end of this glory, you know, that universities have this unearned goodwill. As you're saying, it's almost, some of them are mundacious. I mean, I love my, you know, chancellor, I love my dean, you know, and they love me, but, but you're right. It is a business. And I don't think they would hesitate for a microsecond if I cross some line to cut me off, but they didn't cut off these people. What is it about, you know, academics that is, it's so risky for society. And, you know, we don't regulate academia at all. There was a point in time. I grew up in a part of the world where educators are revered. And at least at that, I mean, And that time, it changed even there.

You know, you were a teacher, whether you were lower school teacher and upper school or a professor, there was a reverence to education because you taught other people. I mean, let's face it, if you ask people what they thought professors did, they would say they'd teach students and therefore they're valuable. We have lost that goodwill because of the way we behave. Now, the arrogance, the ego with which we carry ourselves. When I say we collectively, we put ourselves above the common person. I've seen professors argue with people and they say, I have a PhD, you don't.

How dare you argue with me? In many ways, that is kind of laid the groundwork for people not feeling any sympathy. I mean, if you think about why people haven't run to the defense of universities, as the administration has targeted them, the reason is nobody feels sorry for faculty. They feel that they've had a cushy life, that they've essentially not earned the right to be defended because of all of the privileges they have. And we have a lot of privileges. I think, you know, I'm reminded of the Spider-Man lying, the great privilege comes responsibility. We need to earn back that respect.

And the way we do it is by saying, look, we might be experts in a tiny little field of a tiny little field of a tiny little field because if that, no, we might. be experts, but we're not experts in the rest of the world. So we're not going to dispense. And that's the problem is we left our domains of expertise and started sparting off about things that we really were not. So you're a professor of literature. Stop sparting off about, you know, economics or physics, acting like you're a master of all domains. I think we need to be humble about what we truly have learned. I mean, I, you know, that plumber that you call into your, into your house, has his own area of expertise that perhaps more valuable than the expertise you might bring to the table. Right. AI is less likely. There are experts in every dimension, but for whatever

reason, we thought because we had this PhD, the one thing I've refused to be called in my life is Dr. Demoderant. It, I mean, when Europeans do it, I find it extraordinarily hubristic, I mean, which is the doctor itself is, hey, look, and I, I'm more learned than you are. I think we've kind of earned a disrespect that's been dished out and with social media. You see this disrespect in full, you know, because on social media, everybody's, so you can put professor in your name, but nobody really cares. In fact, you may bring you more insults. Right. If you kind of, you know, engage in that. Hey, everybody. I'm usually the one that asked my guest to judge their books by the

their covers, but today I'm asking myself to judge my own book by its cover. My newest book, Focus Like a Nobel Prize winner, is chartful of advice, life tips, and focus and productivity tips from nine of the world's greatest minds. Nobel laureates ranging from economics to peace, to physics, of course. So go to Amazon and get the Kindle copy today. I wonder though, you know, the stickiness that you brought up is so pernicious because, I mean, I'm thinking now as you're talking about this varsity blue scandal. Remember, like, eight years ago, there were these Hollywood actresses,

and one of them was married to, like, a hedge fund manager, and they were desperate to get their kids into USC. Many of my relatives and friends have gone there. They paid, you know, thousands of dollars, maybe half a million dollars, ended up serving some brief amount of time in jail. No other place in society would one risk such a thing, especially, yeah, to get into UCSD or USC?

Are there things that are so sticky, The walled gardens are so high. You know, I was talking to my son yesterday. I was like, you were born into an Apple ecosystem. Sorry, kid. You know, like, I used Apple when you were born. All your baby pictures are on my first iPhone. It's very sticky, and he's now born into it,

and maybe his kids will be. Are there some things that are such deep moats that we can never really hope as human economist hominid or whatever our stuff? You know, it'll happen incrementally. I'll give an example. MBAs have always been two-year programs.

No, you took two years. you get an MBA. In the last decade, the fastest growing segment in graduate business schools is one-year programs, nine-month programs, six-month programs. In other words, universities, to try to keep the numbers up, I'll wager the way this is going to show up at universities is there will be universities that offer a three-year program, kind of cut back on your core classes, get you out sooner. I think that and the fact that the reason this can, I'm, I'm going to going to use the word scam guardedly. This scam that we call university education has been able to raise tuition, 6, 7, 8% a year for the last 40 years, well above inflation, is because you had a

federal financing system that keeps the money machine going. We now are student loan in the trillions, right? It could potentially bring the economy down, but the machine keeps feeding universities. Because if people actually had to raise the money to pay, I mean, Yale now is almost 100,000 a year. If you had to raise the money to pay 100,000 and after tax dollars, because no tax reduction comes from this, it's almost impossible to get to that with traditional loans. So I think that two things are going to crack. One is that student loan guarantee is already cracking because it's just way too big. We can't sustain it.

This year, I think that there's a $50,000 cap. on tuition and a surprisingly large number of universities. And perhaps not surprisingly, I've decided to bring the tuition down to 50,000. What is the next year the government says this is working? Let's make it a $40,000 cap. It's going to be a combination of shorter programs, less tuition, and you're going to see colleges start to close down. Small colleges start to close down because they can't maintain the numbers.

And so this is going to be a slow motion disruption. already showing up in the job market for PhDs. I know what the job market for physics PhDs is, but the econ PhD job market has imploded. Finding a job as an econ PhD used to be easy because business schools were the growth engine. They went to work at business. They didn't go work in the econ departments, but business schools are not growing because their primary clients, investment banks, and consulting firms are not hiring as many. And those firms are not hiring as many. And those firms are not hiring because AI can now do what a banker. So there is this effect that's kicking in from the other end of the spectrum, which is if you don't get employers who hire you, which is what the

draw of going to big university is, it's going to start eating away with, can I pay the money or do I want to pay this money to go to that university? Hey, book lovers, we're judging books by the covers. We know we're not supposed to do it, but it's into the impossible. There's nothing to it. Let's take a look. So let's do what you're not supposed to do, Oswaffe. Let's go through this book's cover, first of all, the title, the subtitle, and the cover art we don't have to go through. But I've read it.

It's part of this little book series, but this is a fully revised and updated edition, draw your attention to the fact that there's an app as well. So title and subtitle, if you would. It's one, I mean, I have 12 books. That is the smallest of my books. It's actually my first book. was a valuation book in 1992. And I have a textbook called Interested Valuation,

which is 1,200 pages long. And it's dense, it's boring, it's not meant to be light reading. And Wiley came to me about maybe 10, 12 years ago, or longer, 15 years ago, and they said, look, now we'd like to create a version of your book that people can read, because they want to understand valuation.

I mean, my doctor, in fact, that I would go to the Pullman Clinic in La Jolla, Now, when I walked in, he said, you know, I have been reading your book, no. And I said, you're a doctor. Why are you reading a book on valuation? He said, no, I want to understand investing. And he could read the little book evaluation, the investment. So this is a book that forced me to take what I had taken $1,200.

And let's face it, when you have unlimited pages to say things. You get lazy. You take 10 pages to say something that he can say in two pages. So I did this as almost a test for myself. Can I take 1,200 pages and compress them into a couple of hundred? And I found that it wasn't that difficult. No. Just like I've taken my 26 sessions classes and I teach them in a day,

I've discovered that the more I start to understand something, the less time I can actually explain it. It's by one of the tests around or do I truly understand something. So a book that kind of compresses one of my big evaluation books into a smaller package. so people who have lives to live, other lives to live, can read this book if they want to get caught up on,

I want to understand enough about valuation that I'm not even going to do valuation on my own, but then I get that equity research analyst at Morgan Stanley, or my wealth manager from JPMorgan call me and say, you should buy Palantir because it's a great company. I know what questions. to equip people with that basic knowledge to push back because there's a lot of selling out there.

Selling of bad ideas by people, I would say we should know better, but really don't know much better. They really don't know much more than you do. They said that this facade of, hey, I understand investing. The book was designed as much to give you the capacity of value companies if you truly want to do. And there are a few people who get curious enough about valuation that try it out. But a lot of people read it because they want to get informed enough. that they don't fall for scans that get pushed on them.

Now, the app itself has a history. It goes back about almost 15, 20 years. It's a app I developed because I looked at what bankers and equity research analysts did. And it's almost entirely mechanical, right? They made big spreadsheets, 20 worksheets, 300 line items, but it's entirely mechanical, where everything is a percentage of,

some number at the top. And I said, if that's what you're selling to your clients, I can do that for free and give it to your clients for free. So the app's actually designed to do what bankers and appraisers do and say, look, you can, no, you can get a sense of what these guys do, but you don't have to pay this hefty fee. It's a kind of app that you can use sitting at, you know, at a gate in the airport waiting for your flight, and you know the numbers for your company, pull them in, 12 numbers, it does a basic valuation. Is it a valuation you can invest in? Probably not, because you need some faith and a story to go with it,

which is another one of my books about how every valuation you're telling a story about a company. That without a story, it's a bunch of numbers. So the app was designed basically to, as a short across the bow, again, for appraisers to say, look, guys, I can do this. I can do this for free. And I'm going to give it away because I want you to top your game. do something that I can't do this easily by just replicating, the purely mechanical.

So the book and the app kind of capture one of my concerns of what's happening in valuation practice, which is people are running mechanical. They're not valuing companies. They're running financial models where historical data feeds in, extrapolates, and basically the models run themselves. The banker is almost there as an intermediary. kind of connecting pieces if needed. So it's really to send that message to people as well as, hey, I can, you know, anybody can do this

mechanical stuff. And you know what? ChatGPT, there are versions of Chat JPT that now take my book. And you can ask ChatGP2 to a value company using my book. Yeah. And you don't even need the app anymore. It'll do it because my models are out there, my spreadsheets are out there. It'll push the numbers through and say, this is what the value of the company is.

And I think, I'm hoping this makes appraisers rethink how they approach valuation, that they're not just mechanical number crunches. They actually think about companies when they value them. You mentioned, you know, kind of the story component. And, you know, it made me think a little bit about, you know, when I do and, you know, if a physicist publishes a parameter estimate, say the Hubble constant, I always say it's wrong unless you give me error bars, unless you tell me not only, you know, how awesome it is if you're right, but how you know that you're not wrong. And we can't write a paper. I won't accept the homework assignment without an error bar. And yet, you know, I'm looking through this wonderful book. I know it's not a textbook. But, you know, here's tables and, you know, I'm thinking about the late grade Danny Kahneman, you know, this happiness study. And it's like, oh, $75,000.

I'm not quibbling about the amount. I never see an error bar on, at least on the social psychology. It tells me, maybe the story can outweigh the value. I mean, you, you've dismayed over things like Tesla and Palantir on other podcasts. But how frustrating is it when there doesn't seem to be much of a science, or at least it's more psychological story-based, that can equal or outweigh the quantitative analysis that you're so expert at? Does that frustrate you?

No, it doesn't. And I'll tell you, it's the biggest challenge you have is a number cruncher in investing. If you come from a numbers background, you want precision. You want to make sure. In fact, when you do error bars, you want to be, outside the error bar, right? And I can almost guarantee there isn't a single stock in the universe that's outside the error bar. Here's how we deal with it. And this is a lot of large

numbers. It basically comes to your rescue, which is, let's say that I buy 50 companies. They're all undervalued, all within one standard error of my expected value. If I buy 50 companies, and I'm at least on average adding something in my valuation, that's a key, something to the table. Across the 50 companies, the fact that every one of them fell, just one standard error way, starts to fade. And that's why I've always been a believer that if you want to go out and be an active investor, don't pick one company, don't pick five companies. You need the law of large numbers because this is a game with so much noise coming from psychology and mood and momentum that you need the numbers to work in your favor. So my,

requirement is actually a lot lower than yours because I don't need to be right on every single. In fact, I don't need to be right on more than 26 out of 50 as long as in the aggregate I can deliver that average value. The second is much evaluation was built in the 1970s and 80s with point estimates because that's what you could do. Today, if you look at most of my valuations, I follow up my point estimate valuation of the Monte Carlo simulation. Essentially, I'm saying, look, when I estimate revenue growth for Tesla, there's going to be a huge band of error around that estimate. Why don't I be honest and say, this is how wrong I could be, and essentially put that in, I get a distribution of value saying, what the heck am I going to do with it? It guides my

investing, right? Because I'm not just comparing the median value to the price. I'm looking at the 25th percentile, the 75th percentile. It guides when I buy, when I sell. It puts some discipline to process. But having done all of this, if you asked me, is it going to pay off, are you going to beat an index fund? I'm going to make a confession that is going to terrify you. You could do everything right for the next 50 years. And at the end of 50 years, an index fund investor could have still beaten you. And ask people, would you be okay with that as an active investor? And my answer is, I'd be fine because I enjoy the process.

As long as I do no harm or create something that does serious damage, I'm okay underperforming index over the next 50 years. But that's why I have zero, zero time and zero patience for these arrogant hedge fund and private equity investors who come and say, hey, not only can I beat the market, I can beat it by 10% guaranteed. Where in the world did you get that guarantee from? You're either a fool or a fraud, and many of them fooled themselves into thinking that they can beat the market because they've been lucky five years in a row. This is why a bond trader at Goldman has made a lot of money the last five years can create a hedge fund say, I'm a great investor. I made money. Five years in the bond market, you make money because you're lucky, more, you know, 95% of the time,

5% is skilled. I think this is a business where it's easy to mistake luck for skill, then get carried away and start building these castles on top of strategies that really don't work. But you're right, there is a lot of noise in this process. It makes people uncomfortable. And the word I use in investing is faith. I use the word fate because you asked me, to prove that my value of Tesla is right, I can't do it. If you ask me to prove that even if my value is right, that the price will adjust to value, I can't do that either. The entire process is built on faith. And it's entirely okay to say, I don't have faith, and go buy an index. That's the thing that's interesting, is in investing you have a null that you can go to if you

don't buy any of this stuff. It's buy an index fund. Buy an index fund, put your money, go back to living the rest of your life. You can live a perfectly happy life without a ever knowing how to value a company. So I don't have this ego to claim that if you don't understand valuation, your life will come to nothing. You'd be perfectly okay. But, you know, to the extent that you want to be an active investor, I think it's nice to understand what value comes from, what causes value to change. So I go to this process with open eyes. I don't expect to be rewarded for doing the right thing. I try to do what I think is consistent with my thinking about markets in investing. And I hope that that will deliver that extra return over and above an index fund.

In your wonderful substack, which will link below, musing on markets, you write that attaching numbers to uncertainty comforts ordinary people, even when the numbers are fragile. I want to ask you, what's the most dangerous comfort number in finance? I mean, you said about the psychology and so forth, you know, PDE or whatever. What is the most dangerous number in front? The one that almost brought us down as an economy is value at risk. Value at risk was a number that banks used to gauge how exposed they were to bad events. So the way it just would work is we worked at J.P. Morgan at the end of every day, there'd be these number crunches.

That's all they did. It was they looked at all the open positions J.P. Morgan had. And they would come to Jamie Diamond. And on his desk, they would put, this is our value at risk today given. and you wanted to make sure the value at risk was lower than the buffer. Because all banks build a buffer, right? If you break through, the value at risk is low, you're safe. The only problem in, and I'm not a great fan of Nassim Talib in specifics,

but one of the contribution that Nassim's book made was, no, the world is not a place full of normal distribution. It's amazing how in finance we've used the convenience of the normal distribution, because it makes us feel comfortable. So valued risk was built on the premise of two standard errors, you know, three standard errors will never happen. Six standard errors are unthinkable, but we live in a real world where that can happen.

That's the black swan, that unusual event. So the problem at much of risk measures, valued risk specifically is we're not designed. Many businesses are not designed to get a Six Sigma shock and survive. And if that business can take the economy down like banks do, you need to create models that capture the Six Sigma risk. So I think that, you know, value at risk comes to mind as the most obvious metric, but there are a lot of risk metrics that are built around normal distributions that can get investors

and business into trouble, especially if they believe their own hype and start borrowing money to fund their investments. Because then that four sigma event makes you bankrupt. You just don't have the money to cover it. Now, I think that homeowners have to start understanding this process because the last century, typical homeowner could borrow 80, 85% of whatever they're borrowed. And they still do. The only problem is home prices have become more volatile for a bunch of reasons.

They're less localized, more global, more private equity investors. We've invited the world into the investment process. They behave more like stocks than traditional real estate did, which is, okay. if you think of it as an investment class, but it does mean that you've got to stop borrowing 80 to 85% of your home to fund it because this is a very different environment for real estate prices than the last century was. So sometimes you got to revisit things you were talked to to do, which is okay, was okay in the 20th century, but will not be okay in the 21st century because where to shift it underrest. You talked recently on a podcast. You were somewhat apoplectic. You're

talking about really not finding value anywhere, which obviously doesn't mean there's not valuable opportunities out there. But you mentioned something to him to buy collectibles. And I found that very, very startling, shocking almost. Because I immediately went to what collectibles could he possibly be talking about. So what are you talking about in terms of collectibles? Now, I tell you the problem we created for ourselves, if you go back 40 or 50 years, the investing word was segmented, right? And I'll give an example. If you thought U.S. stocks were overpriced, you could go buy European stocks or Asian stocks because global equities were likely correlated with each other. So when one market did badly, other markets continue to do well. When I got

my MBA in 1979 through 81, that was the basis for the lesson you were taught of, spread your money diversify internationally. And we sold that lesson too well. Because yours, what happened is people diversified internationally. And I'm talking about the Black Rocks, or Van Goghs, they all do it, is it turns out that as you spread your money across the world, markets, global equity markets start to move together. And we take a look at crises 2008, 2020, the S&P 500 is down 30%. Check out Beijing, check out the Centsex, check out the Bavispa. They're all down by 30, 35%. Global equities have become correlated. So it takes away one way in which you could hedge. Then you invest in bonds. They don't behave the same way as stocks. And then

you get to 2022. Stocks are down 18 percent. Bonds are down 20 percent. Bonds are starting to move with stocks rather than in the other direction. He's saying that's okay. We have real estate. We go back all the way to the 1970s when inflation was a problem. Real estate was your hedge. It was the one rock which held through the 70s as stocks and bonds melted down. Real estate held its own. Why it was localized. It was the investor base for real estate was primarily considered of real estate developers and people investor only in real estate. They wouldn't even have known what stocks were doing. They just basically stayed in real estate. And there again, people are so, you should diversify the real estate. And we did it by securitizing real estate.

Mortgage back securities from Lou Ranieri, real estate investment trusts. We made it easier for institutional and individual investors to hold real estate. In the process, we've screwed up real estate as well, it starts to move more like stocks and bonds in the last 20 years. Basic problem here now is, you know, during every crisis, people somehow find my especially distant relatives, who I didn't even know existed, find my email or my phone and call me and say, I'm scared. Where is this safe place for me to move my money? And the response I give people is it's getting more.

and more difficult to find that say, even US treasuries. If you remember, May of last year, Moody's became the third and final rating agencies to downgrade the US. There is no safe place left anymore. And if there's no safe place left, we're in a really bad place psychologically and his investors. See, we go back to November when I did this, this podcast, people asked me about stocks and stocks are extremely richly priced. You're saying, well, it doesn't mean I can pull my money out of stocks and put in real estate. Real estate is extremely richly priced. He's saying, okay, what about bonds?

Bonds are richly priced as well because interest rates look low relative to inflation and potential catastrophes. Every financial asset class is overpriced. So there's no place for you to move within financial assets, which leaves us with what? It leaves us with real assets. it leaves us with real assets which don't have income stream. Because the minute you create an income stream, somebody securitizes it and trains it.

So, you know, rental properties used to be separate, but now rental properties are owned by Blackstone and, you know, basically companies are trade in that space. You know, so you are finding a world where if you think markets are overpriced, there's no place for you to go. I've never been a big fan of gold. It's obviously an investment of incredibly longstanding.

It's an investment in incredibly longstanding. It goes back thousands of years. It predates currencies, right? The way currencies initially got their respect was they connected them with the gold standard. The gold was what allowed currencies to kind of find. But I can understand what draws people to gold. What you're describing is a word. but if you don't trust financial assets,

you're going to go to something that's non-financial. You go to gold and silver. In some ways, that was the sales pitch for Bitcoin early on, is you're paranoid about central banks ruining the world. The segment of the population that believes that a catastrophe is ahead of us is larger than it's been probably any time in the last 50 years. There's always been a little paranoid group

that thinks the world is, ending, the world is ending, about gold. That group is now bigger. It's drawn in people, you know, who Ray Dalio, who think of as a serious financial market investor. Jamie Diamond talked about gold. There are people clearly being drawn into the space because the risk of a catastrophe is probably greater because this economic world order we put together after the Second World War is coming apart for a variety of reasons. Trump might be your obvious, you know, you can point to him, but it's really, it's been happening for the last 20 years. It's kind of building to it. And the question is, what replaces it? And we don't know. That's the catastrophe issue.

We're going to go be in the space where there's nothing replacing an established global economic order. So then the question becomes, what do I do as an investor? I can't, you know. And my suggestion was actually incremental. I said, don't sell all your stocks and buy a collectible. That's not a great idea because then you'll never get that. bad. But as you accumulate, you know, as you sell things and you get cash, at least think about adding something. Buying gold is not a great, it's not a great long-term investment. It's going to deliver low returns. But you're buying insurance against this potential catastrophe. Now, my advice in collectibles, so stick with things that you get utility from for other reasons. Don't buy,

no, Picasso's, because you think Picasso's will go up. If you hate the look of impression, painting, right? By Picasso is because you enjoy looking at that Picasso. So if you're going to go collectible, go baseball cards. If you're a baseball fan, you think that's where you can bring your expertise. Pick a collectible that plays into something you truly enjoy. This way, if it never makes money, you get a side benefit from it. Yeah, I did this a few years ago. And I got, you know, when my first book got my, you know, pitiful advance, probably the square root of the advances on your books. I bought a second edition of a book by my hero, Galileo. I couldn't afford the first edition. It's actually more rare than a lot of his books, the first edition. It's called on the military

and scientific compass. And you're like, what is a military compass? But it was actually a slide rule. He invented the slide rule. And what he would do with it, he was very smart. He didn't invent the telescope. But he was also, he was a hustler. He was always trying to make a side hustle, make some money. He wasn't never really quite rich. He had lovers and mistresses and illegitimate children, as we know now. He had to support this enterprise. And so he would do tutoring. Imagine that your students would live with you, Oswath. I mean, I don't know how that would be. Also, when he would teach back then, tenure wasn't in existence, you know, it was a barbaric times. The students would go on strike and they would stop paying you at the University of Padua. So he would take him in into his

house. But he also wrote books, a famous one being, of course, the Sidurius Nuncius, the story messenger, which described the operation of the telescope, but he didn't explain how to build it. He kept the monopoly on how to build it so that he could keep making these for the courtesans, for the dukes and the duchesses and the doges and so forth. So he was quite smart. So I bought this book, second edition, a few thousand dollars, and in it, it goes through all these different things you can do with the slide rule, you know, which is a huge invention back then that he worked on. And one of them is converting currency. And I've never read a book where I went to like scream at the author and say, God,

Damn it, Galileo, just keep a bunch of the copies of these books because it's going to be worth a lot. He goes through this conversion from Lira to Scootie and to Dukots. And I'm like, they don't even exist. You can't even get a Scootie anymore. But the book is a collectible and it's so beautiful and it's illustrated and it's worth the first edition, which I can't afford, is worth millions of dollars because he only made 20 of them and they all, you know, disintegrated. So I took your advice a couple of years ago before I even knew you existed. And I did buy a second edition book, which it doesn't, hasn't appreciated it at all. But it gives me a lot of pleasure.

That's exactly it. And that's what I tell people about collectibles, right? Because sometimes, I mean, people who are that podcast, I mean, I'm usually not a do-sair, thought I was dooming and glooming. And there were people who are saying, look, I should I sell all my stocks and buy gold? And I said, that's, you know, go back and listen to the podcast. I told people what I do, which is normally when I sell stocks, it goes back into another stock. I usually try to stay in equities because time out of the market is much more difficult to

overcome than market timing. And I said for the first time and a long time, I don't find myself eager to get back in the market. So when I sell something, I'm holding it as cash. I mean, I'm not a baseball card collector. Gold and silver don't appeal to me. But I did find a collectible that I found appealing. I also have to think about, you know, at this point, I have to think about my kids and would they want to be. So you have to think about the utility of doing this. But if I did go into collectible, it would be because there is no financial asset class out there that is cheap, right? And if they're all expensive, you're jumping from one expensive asset class to another, you're really not gaining much. You're not getting any of the diversification

benefits. You're just investing in something else that'll move a lot when bad things happen. If you had a motor in university, what book would be required reading? in any domain, and what book is completely overrated and would be banned, not burned, but ban from Demoter and you. I'm going to say something that might shock you. I think we read too much, and we listen to other people too much. We think too little. So the first thing is, any book that's over a couple of hundred pages, I would ban, because

I think people say, any, how-to book I would ban, any book that tells you, any book that's a cookbook version that essentially says, I'm going to give you the... that recipe I'm going to ban because we're losing our reasoning muscles. I think we're in mean, if evolution works its nasty little trick, I wouldn't be surprised that 50 years from now, we're unable to reason our way to answer almost any question because we've Googled. Basically, chat, GPT and Google answer every question. So I would want questions that make you think. I love the Martin Gardner, aha books. Lisa, you know, from the New York Times. He used to write the mathematical. Puzzles and them,

so I think that books that make you think, books that make your reason, are the books that I would emphasize because we need to think for ourselves and, you know, strengthen our reasoning message. So that's what I'd push for. All right. If markets are so efficient,

why do bubbles and black swans keep humiliating experts, including Isaac Newton, who I've got a, you know, finger puppet out here somewhere too, at the South Sea bubble? Why do geniuses fall prey to, humiliating bubbles. Yeah, I think it depends on what you mean by efficient markets. By efficient markets,

we mean that markets get the price right. Markets are incredibly inefficient. They're noisy. They make huge mistakes. Here's my definition of market efficiency. They're much more robust definition. My definition of market efficiency is you can't make money off those market mistakes systematically. And markets make huge mistakes, but they make them in such a random, unsystematic way that any active investor who says, I found a market mistake, I'm going to exploit it. You look back at their returns two years later and an index fund has beaten them. So I think market efficiency depends on your definition. My definition, markets are actually incredibly good at what they do.

I mean, think about it, especially in the last five years, every time we've come to a fork in the road. and we've had a choice. But the markets tell you this is what we expect will happen. And experts in a domain tell you this is what is going to happen. Every single time, markets have been right and experts have been wrong. Go back to COVID, right? Early in COVID experts, vaccine experts showed us there is zero chance that a vaccine is going to show up in the near term because vaccines take such a long time to test.

And market said, I don't think so. I think we'll figure out something. and markets went up and five months later, there's the vaccine. Two years later, the inventor of the vaccine, Catalin Carrico, came on this very podcast. Phil Detlock has his great book on forecasting by experts versus generalists. And he discovers it in every single forecasting task the generalists beat out. And if you think about market, it's the ultimate crowd judgment. Can crowds be wrong?

Absolutely. So it's the wisdom of crowds and the madness of crowds in that same space. And I love watching markets, even when they're crazed, because the very fact that people are trying in real time to make a judgment on something so insanely difficult to put a number on, that everybody, experts are throwing up their hands. I remember the tariffs were announced end of March. People said, we can't even deal with this. Markets said, you don't have a choice. We have to deal with it and make our judgment. And I think that's the most magical thing about markets is in real time. They make judgments on things that experts just walk away from. And for that reason, you can view markets as making mistakes, but you always have to view them with respect. I've got to look at what markets did before I make my own decision.

Okay, you've got $100,000. You have to put it in one of these assets. Gold, Bitcoin, a single pre-IPO stock in an AI company of the moment, or a U.S. government bond, or an NFT, like Bored Ape or a cyberpunk, almost all of those that you listed, the NFD, Bitcoin are not investments, that trades. You can't value Bitcoin. You can price its, demand and supply.

I wouldn't want that 100,000. That's my entire wealth riding on something. Even if I thought great things are going to happen with Bitcoin, I'd probably go with a treasury bond because I didn't have the choice of something that spread. You invest in risky assets. you've got to spread your bets. So it's got to be some investment

which allows me to spread my bets and none of the other choices other than the T-Bonds would have allowed me to spread my bets. This has been wonderful, Oswath. I hope we'll meet in person someday. You talked a little bit about plumbers

and hedge fund managers. I'd like to tell you a joke that Jim Simons, my late great mentor, told me, he said at 3 a.m. on his Park Avenue penthouse one night he had a toilet leaking and he called a plumber.

Plumber came over, went like this with a rent, three seconds later, the leak stopped and said, that'll be 500 bucks. And Jim Simon says, what are you talking about? That's more than I make. And I'm a hedge fund manager. And the plumber said, well, I used to make a lot less too when I was a hedge fund manager. Awesome.

Have a great day. This has been wonderful. Thank you. Today's conversation wasn't really about markets. It was about uncertainty. Trust in the discipline of admitting what we don't know. And if you enjoy this episode, you'll love my inner. with the late great Jim Simons, who treated markets not just as stories to believe, but as signals to test.

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