Money Rehab with Nicole Lapin - Big Economic Predictions for 2024 with NYU Professor Scott Galloway

Episode Date: January 18, 2024

While we don't have a crystal ball, we do have Scott Galloway (Professor at NYU Stern School of Business, host of The Prof G Pod and Pivot with Kara Swisher)— so today, Nicole and Scott try to tell the future. They cover all the big economic questions for 2024: where the opportunities will be in the market, whether NVIDIA is even cool anymore, what the year will hold for wannabe homeowners and a whole lot more.  To find Scott's podcasts and newsletter click here.

One of the most stressful periods of my life was when I was in credit card debt. I got to a point where I just knew that I had to get it under control for my financial future and also for my mental health. We've all hit a point where we've realized it was time to make some serious money moves. So take control of your finances by using a Chime checking account with features like no maintenance fees, fee-free overdraft up to $200, or getting paid up to two days early with direct deposit. Learn more at Chime.com slash MNN. When you check out Chime, you'll see that you can overdraft up to $200 with no fees. If you're an OG listener, you know about my infamous $35 overdraft fee that

I got from buying a $7 latte and how I am still very fired up about it. If I had Chime back then, that wouldn't even be a story. Make your fall finances a little greener by working toward your financial goals with Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN. Chime. Feels like progress. Banking services and debit card provided by the Bancorp Bank N.A. or Stride Bank N.A. Members FDIC. SpotMe eligibility requirements and overdraft limits apply. Boosts are available to eligible Chime members enrolled in SpotMe and are subject to monthly limits. Terms and conditions apply. Go to Chime.com slash disclosures for details.

I love hosting on Airbnb. It's a great way to bring in some extra cash, but I totally get it that it might sound overwhelming to start or even too complicated if, say, you want to put your summer home in Maine on Airbnb, but you live full time in San Francisco and you can't go to Maine every time you need to change sheets for your guests or something like that. If thoughts like these have been holding you back, I have great news for you. Airbnb has launched a co-host network, which is a network of high quality local co-hosts with Airbnb experience that can take care of your home and your guests. Co-hosts can do what you don't have time for, like managing your

reservations, messaging your guests, giving support at the property, or even create your listing for you. I always want to line up a reservation for my house when I'm traveling for work, but sometimes I just don't get around to it because getting ready to travel always feels like a scramble, so I don't end up making time to make my house look guest-friendly. I guess that's the best way to put it. But I'm matching with a co-host so I can still make that extra cash while also making it easy on myself. Find a co-host at Airbnb.com slash host. I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. In January 2023, I gave you my financial predictions for the year. And money rehabbers,

if you have been along for this ride, you know that we made all the right calls on interest rates, inflation, and the fall of crypto. Sorry, bros. To give you some predictions for 2024, I call up Scott Galloway, who, don't tell him I tell you this, is kind of a big deal in the business and finance world. He's a professor of marketing at NYU Stern School of Business. He's the host of the Prof G pod and the co-host of the podcast Pivot, along with the iconic Kara Swisher. He has also founded and advised a whole bunch of successful companies. Scott and I talk about all things money for 2024, where the opportunities are in the market, which companies were bullish and bearish on, what the year has in store for homeowners, and a whole lot more. We also talk about Scott's predictions for the 2024 presidential election.

And because Scott is my Jewish brother from another mother, we talk about which president would do a better job of stopping anti-Semitism. That ended up being a whole longer conversation that we couldn't fit in just one episode. So stay tuned for that part of our conversation on Friday. But for now, here's a sneak peek of what we think 2024 has in store. Scott Galloway, welcome to Money Rehab. This is so exciting. So I realize this sounds arrogant. I

get invited to a lot of podcasts and everyone on my team was literally like, oh my God, Money Rehab, I love her. And you're huge and you're successful. So this was an easy yes for us. You tell that to all the podcasters. I do, but I meant this time it's true. But it felt like it hit different for me. We mean it. I appreciate you. Always. So people, at the end of the year, we love champagne holiday parties. Honestly, the cool nerdy kids, though, love it because your 2024 predictions come out.

I do love your predictions. They're always really smart on. They're always really smart. You had 14 predictions for 2024. I'd love to cherry pick some of them that are near and dear to our listeners' hearts. And I'd love to start with inflation. I love that in your predictions, you called J-PAL gangster. Thank you. I agree. I found that unless you acknowledge that Taylor Swift is in fact Jesus Christ, you're somehow, you're an awful person. So let me just say she's

an amazing person and a phenomena. I do think the most consequential person, however, of 2023 was Jay Powell. I think that for him to as aggressively raise interest rates as he did in the face of senators warned to the far left and the far right seemed to unite around that he was making a huge mistake raising interest rates that fast. I think what the Fed has pulled off here is, I would argue, the Goldilocks economy. We're growing faster than any G7 nation, but our inflation is the lowest. That's just kind of unheard of. Our unemployment is at historic lows.

Our stock market makes the hang sang look awful for the last 10 years. I think that J-PAL has done an amazing job. I think going to the core question of inflation, I think the supply chain is getting ungunked. Inflation at the end of the day is too many dollars facing too few products. So let's go to the supply side. All the companies I'm involved with or on the board of have spent the last three years trying to ungunk the supply chain. What do I mean by that? I was on the board of Urban Outfitters. We woke up and found out that 80% of our tops were produced in like a 10-mile radius of Shenzhen. COVID breaks out, and all of a sudden, we don't have tops in 550 stores, and it kind of shuts down the business because, and I did not know this, tops are the key to accessorizing an

outfit. So we have spent a lot of time trying to put factories in Mexico, Vietnam, some reshoring, and you're seeing a much greater heterogeneous supply chain. There was no slack in the supply chain pre-COVID. It's much more agile now. I think the supply chain is getting ungunked, if you will. We're also, in my view, on the supply side, AI is going to be hugely deflationary, in my view. And that is, it not only is going to have real impact on a ground level, but I think many of the individuals, the stickiest part of inflation has been wages, and many of the individuals going in to negotiate a raise are going to feel less confident seeing how many jobs are being outsourced across some of the highest profile companies in the world because of AI. I think the geopolitical risks

have been overstated. I just don't see how the Houthis are going to erupt the supply chain. I think these things have all been catastrophized a little bit because they make for good headlines. What? The media loves catastrophizing? Yeah, shocker, right? No way. So I think we're going to see deflation in 2024. So we'll see. Because of AI? Confluence of factors, a more robust supply chain. I don't think people have really absorbed the impact of higher interest rates. And when their mortgages roll and they have a much higher rate, when they aren't getting the type of increases in salary they used to get because there was a war on talent. I mean, oil production is ramping in the US.

I think energy costs are going to come down. I just think we're going to see technology is ultimately deflationary and we have this kind of technological lollapalooza with AI. And also I'm a narcissist and I like to draw attention to myself, which means you need to be provocative and a contrarian. So I'm predicting for deflation in 2024. You do that so well. You specifically said that inflation is going to drop below the Fed's target of 2.5. So as of December, inflation was 3.4. Does your prediction come from the fact that Jay Powell signaled that rates are going to start lowering in 2024? Or where do you think we're going to end here? I actually made this prediction. I said, and I get a lot of wrong. So let me be clear. In 2022,

when I made predictions for 2023, I said Disney was going to require Roblox. I was wrong. I said that Tesla stock would get cut in half. It was flat. I was wrong. But I did say inflation was going to come down as quickly as it ascended. And we got that right. Inflation literally crashed, if you think about it, in the United States over the last 12 months. If it gets to the Fed's target, it seems to me, and a lot of economists are saying that we're going to see a rebound, like a COVID rebound in inflation. I don't think so. When I look at the economy and I look at production, the key supply chains around production, the biggest arteries, I think that we're going to see more stuff. And I think people are going to start to pull in their horns because I think they're going to feel less confident than they have in the last two years. And also,

I think we're about to run out of COVID money. What was it they had about, consumers had about 100, 1.1 trillion. They were spending 100 billion a month and that was like six, seven months ago. So it feels like we have another four months. Was that all on Urban Outfitters tops? Yeah, there we go. But I really do love the fact that you said J-PAL was the person of the year. And this is coming from a Swifty,

like I love Taylor so much, times person of the year was Taylor Swift. If it were up to you, if you were in charge, you would put J-PAL up there. Look, the guy showed tremendous leadership. People don't remember back when he started raising interest, he raised interest rates faster than I think any Fed chairman since Volcker, maybe. I think he blew by Volcker. And to raise 500 bps, and he, I mean, he basically slayed this monster. And inflation, if you look at the history of the world, it's either the number one or the number two cause of revolution, because nothing gets a family,

Roe v. Wade is overturned. It upsets a lot of us on the far left, but the reality is it doesn't impact most of us on a day-to-day level, at least not in the short run. Inflation, you feel right away. When you can no longer afford to send your daughter to summer camp, you have to go from beef to chicken to just eating potato. You just feel it every day, and you get really angry at the system and the country and everyone and everything. It's a huge underlying threat to societies. And he just went after it and was unafraid, stood up to anyone saying, don't raise rates as fast. And I think if you look at the

economy here and just generally speaking, geopolitically, Nicole, if you were to compare us, say, who's doing better than us? No one's lining up for Chinese or Russian vaccines. If we want to contain a regional conflict, we send the firepower of Germany and Britain in this mobile transport vehicle called a carrier strike force. Our media continues to dominate. And then the technology that might be the biggest technology since the processor or maybe since search is not only in one nation, our nation, it's in one state and one city. I don't think relatively speaking,

we have been this strong in a long time despite the fact that the media and even our own citizens seem to think we're doing really poorly. Well, we're gonna get back to tech in a second. Just really quickly though, money rehab is a jargon-free zone, so can you define BIPs? Oh, basis points. So one percentage, if your mortgage goes from 5% to 6%, it's 100

BIPs. That's like cool finance bro speak. Yeah, there you go. You can take the kid out of Morgan Stanley, but you can't take Morgan Stanley out of the kid. What was your first job, by the way? Let's turn it back to you. What was your first job? I was on the floor of the Merc. Yeah, same thing. I was at Morgan Stanley.ley yeah i was one of three women on the floor that must have been interesting dudes would just pick me up and move me out of their way like open outcry oh gosh and then i went to cnbc and bloomberg and all this stuff it doesn't matter let's not talk about me this is not about me scott let's talk about real estate and double click on what you'd said there because i think it's important uh to paint the full picture in, you said you expected to see a boom in housing sales.

For folks looking to buy a house right now, this would be a super dramatic shift from 2023, of course. So beyond interest rates, why do you think young homebuyers specifically could be optimistic? I mean, who would have thought that interest rates, mortgages going from 3% to 8% would result in prices going up? So essentially, there's a dearth of supply, right? The one thing, the unintended, I think the biggest unintended consequence of this dramatic increase in interest rates would have created this lock-in effect, right, where no one wants to give up their mortgage. And so there's a lack of supply, which has taken up rates. I think as life happens, I think there's a lot of pent-up demand. Death, divorce,

disability, having kids, new job. I just think at some point, the dam is going to burst and people are going to decide to bite the bullet. And while mortgages come down from eight to seven to six, maybe to five, they'll say, okay, we just need to move. I think it's going to free up a lot of supply. And I think that you're going to see, and also young people seem to be doing pretty well in terms of their purchasing power. So I think the combination of declining interest rates, life happening, pent up demand, more supply will result in an increase in sales. I don't think it'll necessarily mean an increase in value. Home prices went from 290 pre-pandemic to 420. It feels like they're fully valued. I think you could see a very strange phenomena here, and that is you could see interest rates come down,

mortgage rates come down. You could see liquidity or sales increase and prices actually come down. I don't think prices are going to go too far north of here. I think it just seems so expensive now to buy a home. But this is contrary to what you say, that young people are just going to get up, move, and travel. Yeah. And just say like, fuck life. We're over the American dream. Well, I think it's both. So Expedia was one of the best performing stocks, I think, in the S&P. I think it's in the S&P last year. And I went and spoke to, at the annual meeting of Expedia, and people, again, blame the markets when things go bad and credit themselves

when things go well. And I said at this meeting, a lot of your success is not your fault. Because I do think a lot of people in their 20s and 30s who were saving $1,000 or $2,000 a month and were out actively looking at a home, and every time they went back to look at a home, it had 14 bids on it, and a similar home was now 15,000 or 20,000 more. I think at some home, it had 14 bids on it and a similar home was now 15 or 20,000 more. I think at some point they got so discouraged and maybe they had jobs where they could go remote where they thought, you know what, let's go to Thailand for a month, not for two weeks, or let's move to Mexico for three months. And a lot of that disposable income, that saved money that was being saved for a house went to travel. I think we'll still see that impact in 2024,

but I also think a lot of people are going to bite the bullet and buy a home. My assistant's looking for a home in Florida for the first time. She got so discouraged through COVID, but she saved some money. Interest rates are coming down, and I think she's kind of ready to strike.

But I think travel, I think there's just a different, I mean, do you feel it? It feels like there's a different zeitgeist where people know, when I started at Morgan Stanley, I got two weeks a year. I took two weeks vacation. But the kids now, the kids now, the youngins,

they do exotic, expensive, crazy, wonderful, cool things all the time. Not once a year. They don't save up to go to Club Med for two weeks. Is Club Med still around? I hope so. All inclusive. But I think travel is going to do really well, continue to do really well. And also just to add on to that, I think we have actually a positive sense of our own mortality coming out of COVID. I think almost all of us know someone that died. I think it's

given people a lot of perspective. It's like, what the fuck am I waiting for? You know, I'm gonna take my husband and I'm gonna go on safari. Well, there's a sweet spot between thinking you're gonna live forever and die tomorrow. Where that sweet spot is, I don't know. I've been watching The Last of Us,

so I'm especially like, I'm like, you know, an infected zombie is waiting around every corner. But anyways. But you think that there's this general trend toward being a nomad and being cool with that and wanderlust and all of that. But going back to your assistant, I think that, as you know, buying a home is not all a financial decision. It's an emotional decision, too.

It's a home. It's roots. Well, and it's household formation, right? It's usually you begin to nest and start thinking about getting a dog and a kid. And it's also a fantastic means of saving. And it really is, I hate to use the term American dream, but- Can we come up with a different- Well, it's turned into the hallucination.

I mean, I bought my first home when I was 28. And the average age of a home buyer has gone up dramatically. How old were you when you bought your first home? Oh, I'm a big renting fan. But I also lived in 10 cities in 20 years. Wow, that's crazy. Were your parents in the military or you just moved around a lot? Oh, this is a whole other thing.

This is a different podcast. Have you been married like seven times or something? What's going on? Zero times, Scott. Zero times. 10 cities in 20 years. Yeah. Anyways, I think buying a home is important.

And I think one a home is important. And I think one of the biggest problems that ails our society and the biggest threats to our society is that we consistently, through all our economic policies, shove more and more money and transfer more money from young people to old people. Yeah, I think it's the fuel on every single buyer to every single problem we have. Hold on to your wallets. Money Rehab will be right back. One of the most stressful periods of my life was when I was in credit card debt. I got to a point where I just knew that I had to get it under control for my financial future

and also for my mental health. We've all hit a point where we've realized it was time to make some serious money moves. So take control of your finances by using a Chime checking account with features like no maintenance fees, fee-free overdraft up to $200, or getting paid up to two days early with direct deposit. Learn more at Chime.com slash MNN. When you check out Chime, you'll see that you can overdraft up to $200 with no fees. If you're an OG listener, you know about my infamous $35 overdraft fee that I got from buying a $7 latte and how I am still very fired up about it. If I had Chime back then, that wouldn't even be a story. Make your fall finances a little greener by working toward your financial goals with Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN. Chime feels like

progress. Banking services and debit card provided by the Bancorp Bank N.A. or Stride Bank N.A., I love hosting on Airbnb. It's a great way to bring in some extra cash. But I totally get it that it might sound overwhelming to start or even too complicated if, say, you want to put your summer home in Maine on Airbnb, but you live full time in San Francisco and you can't go to Maine every time you need to change sheets for your guests or something like that. If thoughts like these have been holding you back, I have great news for you. Airbnb has launched a co-host network, which is a network of high quality local co-hosts with

Airbnb experience that can take care of your home and your guests. Co-hosts can do what you don't have time for, like managing your reservations, messaging your guests, giving support at the property, or even create your listing for you. I always want to line up a reservation for my house when I'm traveling for work, but sometimes I just don't get around to it because getting ready to travel always feels like a scramble, so I don't end up making time to make my house look guest-friendly. I guess that's the best way to put it. But I'm matching with a co-host, so I can still make that extra cash while also making it easy on myself. Find a co-host at Airbnb.com slash host. co-host at airbnb.com slash host.

And now for some more money rehab. Okay, so you're bullish on Expedia still, it sounds like. You also picked out a few stocks for 24 that you're particularly bullish in, in the media space, Warner Brothers Discovery and Disney. You say that the tech sector is generally overvalued. You point to P.E. ratios, how overvalued. You point to PE ratios, how PE multiples look similar to 99, the go-go days, and 2007. As we are a money rehab, jargon-free zone, as I mentioned earlier, can you first break down what PE ratio represents and how you think it's helpful in evaluating stocks' potential and why those stand out?

Yeah. So price to earnings. So if a stock's trading at 15 bucks and it produces one buck of earnings a year or one dollar profit, then it has a P ratio of 15. Where things get hard is a lot of growth stocks have very low earnings because they're constantly reinvesting. So a lot of investors now look at things like gross margins and growth rates to try and put a value on companies. Two-thirds of the companies that went public just 20 years ago were profitable. Now it's one-third. So price earnings has become a less kind of reliable or kind of robust metric. I think it's dangerous to stock pick, and I want to just disclose to your young investors. Thank you.

Take a third of your revenue or a third of your income if you want, or a third of your saved money, your dry powder, and buy stocks you're interested in because I think it's a great way to learn. I think it's actually kind of fun if you're interested in the market, if you want to. But take two-thirds or more and put it in low-cost ETFs and index funds because trying to find the needle in the haystack is ridiculous. I don't know more than anybody else, and my assessment after being in the markets and working in investment banking and being an investor and working with the most

esteemed investors in the world is that no one has any idea. Or I shouldn't say that. Some people have less of no idea than others, but for the most part, none of us know. So rather than buying the needle or trying to find the needle in the haystack, buy the whole haystack. Now, having said that, I still buy individual stocks with a portion of my portfolio because I think it's fun and I'm looking for opportunities for outsized gains and I've convinced myself because I'm a narcissist that I can get there.

So I have been dramatically over-invested in tech because I like to think I understand it. Those are the people I know, those are the opportunities I get to invest. When I look at tech stocks, my recommendations, my three stocks I recommended in November of 22 for 23, it was Airbnb because of the travel phenomenon we talked about. It was Meta, which dramatically oversold. Cash Volcano. VR is stupid. Oculus is ridiculous. Biggest tech hardware failure,

I think, probably in the history of tech. Nobody wants to go into an incel panic room with no one with legs. But they were ignoring the fact that Instagram and Facebook were still these cash volcanoes. And WhatsApp with 3 billion users really just hasn't even yet been monetized. Went from 80 to whatever it is now. It's tripled. It's quadrupled. I also picked, to be fair, Chinese internet stocks. And on average, they're down 15%.

So I got that wrong. When I look at the run- up, the tech is registered, specifically the Magnificent Seven, as you referenced, the PEs look really frothy. And so I'm trying to find now value. I'm starting to sell down my tech because I just find it so incredibly, I won't say overvalued, fully valued.

It's always hard to pick the, whenever I sell a stock, it has a tendency to go up 20 or 30% within a month of selling it. It's hard to pick the top. The reason I like Warner Brothers and Disney is I see a dynamic in streaming that's literally out of an economics class. I was a graduate student instructor

in macro and microeconomics at Berkeley when I was in grad school. And it was playing out just perfectly. And that is, it's a growth market. It's an inspiring market. The consumer trends are enormous. People are spending more and more time watching streaming media on a smaller screen. So much capital rushed into it and built such an amazing franchise. It was over invested, taking returns vastly negative, too many players. It is consolidating like crazy.

We might see the number of streamers get cut in half in just 12 to 24 months In addition the writers strike this exogenous impact. We weren't Expecting gave the studios unbeknownst to the writers this Multilateral pause and spending and gave them the opportunity to stop the arms race for the first time in its history Netflix has paused an increase in spending. The last two years, the number of shows being produced is down by probably a third

and they're consolidating like crazy. When Warner Brothers and Paramount or Paramount, I forget the other one, merge, you'd hate to be in the CBS newsroom because consolidation is Latin for cost cutting. In addition, Netflix has given everyone cloud cover to raise prices. I think Disney owns family,

and I think a combination of cost cutting from consolidation, fewer players, and the pricing power they have is gonna dramatically explode their bottom line. And the first signs of hope in what are now distressed assets, specifically Warner Brothers and Disney trading at 10-year lows, I think there'll be like springs that are wound too tight.

These aren't stocks like Nvidia that could go up 3 or 4x, but I don't see them going down a lot. I'm kind of pulling in my horns. I see this as a frothy market, so I want to find stuff that couldn't. Nvidia could go down 80%. I don't think it will, but if it went down 80%, it wouldn't look cheap. I mean, it's trading at astronomical multiples right now. Apple could get cut in half and it wouldn't look, in terms of historical PE, it wouldn't look incredibly cheap. These companies could all go down dramatically. I think Disney and Warner Brothers, it's unlikely they get cut in half from what are decade lows.

And I think there's some decent upside. Not the same kind of upside you get from a tech stock, but I'm sort of pulling in my horns in what I see as kind of a market that's gotten sort of frothy. Well, I'm really glad that you emphasize the index funds and chill. I do have some merch. I'll send it to you that says index funds and chill i do have some merch i'll send it to you that says index funds and chill uh it's it's really important to keep that in mind to play with the amount of money that i guess you can afford to lose and not stock pick especially when you're young and long-term

investors like all of our listeners hopefully are alphabet is also a big tech stock pick of yours for 24 not microsoft though scott, who surpassed Apple, as you know, to become the number one public company ranked on market cap, had a huge AI moment, all these gaming wins in 23. So why not Microsoft? I think Microsoft is one of the best managed companies in history right now. And I just think its performance has been incredible. And I think a lot of that outstanding management and execution is what is probably going to go down as the best corporate VC investment in history, investment in open AI. I think that lot of that outstanding management and execution is probably going to go down as the best corporate VC investment in history, an investment in OpenAI.

I think that's already somewhat built into the stock. I think it's a good long-term hold. It always is. Well-managed, unbelievable franchise. And when I pick Alphabet, I call it my big tech stock pick. And what I try and do is find one big tech stock that I think will outperform relative to the others. And that's the key here because I do think tech is overvalued right now.

So what am I saying? I think the transformative technology of this decade appears to be AI. And I think the point of differentiation in AI won't be the underlying technology themselves. I think AI will make all of the LLMs largely undifferentiated. I think they will each use AI to reverse engineer whatever points of

differentiation each LLM has, and they'll all end up with sort of the same furnace, if you will, or the same nuclear reactor. So the point of differentiation will be the uranium or the coal, the grade of the coal or how sweet your light crude is that you feed into these LLMs, the content. And there's a lot of attention around, well, who does it deal with the New York Times or Reuters or what have you. But when I look at the proprietary content that the Alphabet franchise has, they have access to my Gmail, they have access to my YouTube, they have access to my calendar. So when they see that I'm going to Tulum, it's on my calendar with a bunch of buddies. I go every year. They'll see it on my calendar and go, you don't have flights yet.

Do you want us to start speaking to AI-enabled Expedia and get you the best flights? And we've used AI to know exactly when we should book your flight. You usually stay at this hotel. Do you want us to reach out to them? We see that on the way back, you're going to Miami. And whenever you're in Miami, you get your teeth cleaned at Dr. Craig Spodak in Delray Beach. Should we reach out to him?

teeth cleaned at Dr. Craig Spodak in Delray Beach, should we reach out to him? The personal information around my schedule, my entertainment, my travel patterns will be proprietary to Alphabet. And with my permission, which I will give them, I think people are willing to give up their privacy in exchange for utility, will create, I think, just an AI Lollapalooza in terms of actual practical use that makes my life easier, saves me money, and enhances my entertainment options. Scott, we've noticed on YouTube you're very drawn to these things. Did you know you love Ricky Gervais clips? Did you know he's playing in London? You love space and you have boys. Did you know Moonwalker, this space exhibition, is playing in King's Crossing and you like to do stuff with your boys every weekend, should I get you tickets? And this is the best time to buy tickets. They're going to

have such great information that will result in really practical uses of AI that I think they're going to be able to show more utility around AI in 2024 than some of the other players. In addition, they have so much human capital. A lot of the minds at Alphabet were the original creators of the IP and the deep technology that ended up at OpenAI. So the way I would describe it, to use a metaphor of my favorite film franchise, last year was Star Wars. This year is going to be The Empire Strikes Back and The Empire is Alphabet. I found it, though, interesting that you said beyond AI that GLP-1, so not GPT-4, right? GLP-1, which is the class of drugs that Ozempic is in, is going to be the most interesting part of 24. Why? Why do you think

that GLP is going to overtake GPT? I think in terms of impact on the real economy, so you have to differentiate between the market and the real economy. You could see stocks go up with the economy falters and vice versa. Effectively, the NASDAQ has become a metric for how the wealthy are doing. The bottom 90% own 1% of the stocks, or less than that. So when you say the NASDAQ is doing great, okay, fine. But that's not really how the American public is doing. It has some impact, but not as much. We're obsessed with it, but we don't talk about the fact that 100,000 people are going to die from fentanyl or that 50,000 people are going to die from opioid overdoses. 70% of America is either overweight or obese. 70% of America isn't anything. I mean, that's basically everybody. That's a quarter of a billion people. 70% of two-thirds

of America suffers from this, and it kills more people each year than COVID did. In addition, McDonald's, PepsiCo, Coca-Cola are all just indices for obesity. Obesity has gone from 30% to 40%. In the last 20 or 30 years, these stocks are up 10 and 12-fold. These are just simply indices on obesity. You have this industrial obesity complex that is $1.7 trillion, and that's everything from statins to high blood pressure medication to hip replacements to knee replacements to kidney dialysis. It is an enormous industry in the United States. And when 70% of people are able to basically update their instincts and have scaffolding on their instincts, when we came off the savannah, Nicole, hundreds of thousands of years ago, there

was a dearth of salty, fatty, and sugary food. There was a dearth of free, safe play. There was a dearth of mating opportunities. So our industrial production or our instincts have not caught up toward industrial production. So we're obese, we have addictions to trans fats, to video games, to dopa hits. And GLP-1 is not only an appetite suppressant, it's a craving suppressant. So the people taking GLP-1 drugs are biting their nails less. 60% are consuming less alcohol. Online shopping less. I mean, it's literally scaffolding on our instincts. And when you talk about arguably the biggest industry in America,

maybe with the exception of technology, but by real dollars, is what I refer to as the diabetes industrial complex, hospital systems. I mean, so much of our consumer and medical world rotates around this notion that get young people addicted to shitty food that's addictive, and then hand them over to the diabetes industrial complex where they're going to get charged $11,000 a year for their diabetes medication. So when we see the kind of impact I think these drugs might have, I think it'll have more impact on the real economy maybe than AI. I think this is really exciting for the well-being of America. I think it's now Novonordisk. I think that stock price may already be fully valued.

I think people see the excitement. But I think this is, in terms of real impact on the economy, the technology, I said the technology of 2023 would be AI. That doesn't seem that provocative now. And you would argue we were right. I think the technology of 2024 is going to be GLP-1 drugs. So Novonordisk, as you mentioned, jumped 53% right last year. Do you think there's any room to grow or do you think there's anywhere to play

this trend? I don't know enough about the sector. I think the play, quite frankly, is to go short the diabetes industrial complex, whether it's- Like Pepsi, McDonald's. You're already seeing it. But these companies, I think these companies get the shit kicked out of them. I mean, Walmart has already announced in their earnings calls they're seeing their food sales down. The market is manic depressive. When it starts to see evidence of this, it's going to say, well, there's a reason why McDonald's, I think McDonald's is up 12x. I mean, McDonald's is just outperformed. It's going to dramatically underperform. It's lived by the sword of obesity, and it's about to die at the sword of reduced obesity.

But when recessions happen, people need to still eat fast food cheaply. So who wins? Yeah, but they won't need to eat as much of it. I think this is such a game changer in terms of calorie reduction. I think if people, I mean, the stat I love is United Airlines, I think, estimates that they could save somewhere between $50 and $80 million if obesity is reduced at the rate it's being reduced just because of fuel costs, of safe fuel from having less heavy passengers. I mean, I have people who show up at work now that look like they're much thinner cousins. And they claim that, oh, they discovered gluten. And I'm like, oh, come on, give me a break. Are you on Ozempic or Manchar? I mean, the efficacy of these drugs is just incredible.

And there'll probably be some second order effects that are not positive, but I'm super excited. I think if you look at likelihood of being depressed as a kid, if you're obese, all these things that we don't talk about because we see this politically incorrect, all of these negative externalities of obesity, I think it's going to be not only an enormous unlock financially, but just an enormous unlock psychologically, societally. I think this is the most exciting technology in a while. Yeah, for sure. And you're so good at connecting those dots, Scott. So let's recap the stock section for a second, do a little lightning round, if you will. I'm going to throw out some stocks that we just covered, a couple of new ones. And then if you could tell me bullish or bearish on that company for 24. So I'll say

the name of the company and you just say bullish or bearish. Cool. Hold on to your wallets. Money Rehab will be right back. And now for some more Money Rehab. All right, Novo Nordisk. I think you'd have to be bullish. McDonald's. Oh, bearish. Big fat bear, polar bear. Tesla. Bear, but I've been wrong over. I was a bear on Tesla 10x ago. I thought when Tesla was at 15 bucks a share, it was going to get cut in half. Whatever I say about Tesla, do the opposite. But if you just look at the economics of it, there's so many competitors coming into space. You're already seeing margin pressure. And you have a guy running it who strikes me as reckless and is literally unwinding before our eyes and is worth more than the entire U.S. audit.

Tesla makes absolutely no sense to me. If it goes down 80%, we'll all say, well, of course it did. Having said that, there are a few things I've gotten wrong more often than Tesla. And Elon, bullish or bearish? Look, I don't know. I'm accused of being an Elon critic. I think if I had a button for Elon to go away, I wouldn't press it. I think that he's inspired the EV race.

I think space travel is intoxicating and hopeful. But I think the concentration of power is we've reduced taxes on the wealthy such that people can buy global media platforms or start bullying their board and saying, you need to give me a new class of shares. Or tell Bob Iger to go fuck himself. I think that person would have come under more scrutiny and would have been escorted off the stage in an era where we didn't have people worth $250 billion. I don't think he's a good role model for young men. And I don't think a guy, I'm choosing my words carefully, but I think he's a case study in what happens when

you're a man and you live alone and you surround yourself with people who adore you but don't love you. I think he's turning into a cautionary tale. Disney. Oh, I'm hugely bullish on Disney. Some of the best IP in the world, a good CEO, their parks business has going to do 10 billion in EBITDA. There are a few businesses that have wider moats than Disney. I mean, if you don't take your kids to Disney several times and stay in bad hotels for $900 a night by the time they're eight, child services get called on you. It's just, you have to go. It's the seventh ring of hell and you have to go. It's a rite of passage for parenting.

Yeah. And the IP they have from Marvel to, I mean, they just, their parks, I think Disney Plus will be the third player after Netflix and Max. They have a great niche in family and stocks trading at a 10-year low. I like them. I think it's a great pick. Warner Brothers Discovery.

I like it. And it's a company everyone loves to hate, but they're going to consolidate the market. I think they're one of the two that are in the lead with Paramount. David Zaslav is a good cost cutter. I think CNN is going to have a great year. HBO has built a culture that still manages to produce the most talked about cultural, like they capture the zeitgeist. I mean, I was last night, you know, look at the Emmys. It was basically succession. What HBO has done is incredible. With a fraction of what Netflix spends, they continue to always have on a regular basis the show that everyone is talking.

I started watching True Detective last night. The thing that's really weighed down the stock is the levels of debt. It's friendly debt that doesn't mature for a while at a low interest rate. the stock is the levels of debt. It's friendly debt that doesn't mature for a while at a low interest rate. And I think with consolidation and cost cutting, they're going to show more bottom line, be able to pay down their debt, and people will start to see that they're getting off their heels and onto their toes and they'll become an acquirer again. And they'll be the number two, a distant number two to Netflix. But if you look at Netflix's value, if Warner Brothers Discovery just begins to smell a little bit like teen spirit of teen spirit as Netflix, you'll see a dramatic updraft in the equity. No fucking idea.

I don't get it. I'm a no-coiner. I just don't understand it. What do you think? What are your thoughts on Bitcoin? I keep it to 1% of net worth. You can afford to lose 1%. Yeah.

I don't like cryptos. I think it's crazy that young people have decided they want to save the planet, and yet they endorse an asset class that requires the incremental electricity of Argentina. I just don't, I don't get it. It seems to me central to transferring money among bad actors. I just don't understand it.

Can't find out who invented it. I don't get it. I don't own a coin. I'm on the board of a company called Ledger because I want to learn more about it, and the more I learn about crypto, the more I hate it. Can't find out who invented it. I don't get it. I don't own a coin. I'm on the board of a company called Ledger because I want to learn more about it. And the more I learn about crypto, the more I hate it. I hope it goes away. Tell us how you really feel. So super, super bare. All right. Alphabet. I'm hugely bullish on Alphabet relative to the other big tech players because of its access to, I think, proprietary information that'll feed into their LLM, which will create more kind of better use

cases in 2024 than any other LLM or generative AI. NVIDIA. I am bearish on NVIDIA. I think that the valuation indicates that NVIDIA is going to stumble upon a category as big as AI, a new one, to sell their chips into. It's just hard if you, and it might be a momentum play, but I think it's hard when you look at the valuation. Right now, the valuation indicates they're going to find, there's going to be another innovation that's the size of AI that'll need those chips. I would stay away from NVIDIA. Meta. I'm kind of indifferent on Meta. It's a cash volcano. Mark Zuckerberg and Shelf, there's few people that have done more damage to the world than Mark Zuckerberg or Sheryl Sandberg.

There are few people better in monetizing attention than Mark Zuckerberg. And more people are on a meta platform than are Christians, communists, capitalists. And he's about to turn on the monetization engine at WhatsApp. So I just wouldn't want to bet against them. I'm not bearish or bullish, but it's had just such an incredible run-up. God, what do you think Kevin's system is doing right now? He's like pissed. You think? A billion dollars for Instagram? Oh, gosh. Yeah, I know. Yeah, that was... But think about it. At the time, I spoke at, I remember this, P&G had this event

called Signal, and I spoke after Marissa Mayer. And she had just made a $1.1 billion acquisition, like six weeks after the acquisition of Instagram, but she did acquire from $1.1 billion, $100 million more than Zuckerberg paid for Instagram. She acquired Tumblr, which seven years later was sold for $3 million back to, I think, the founders. Probably the worst acquisition in the history of tech, lost 99.7% of its value in seven years. So Instagram, arguably, maybe behind YouTube or maybe the investment in OpenAI, best acquisition

in history, Tumblr the worst. And they were made within a month of each other. We end our episode, Scott, by asking our guests for a tip that listeners can take straight to the bank. You gave so many, but can you give one more just on investing, technical analysis, how to get on Kara Swisher's good side, saving, predicting the economic future, anything? Live like a stoic. Gamify saving money. Move in with your parents before you own a home. Go on cheap dates. Really try to gamify saving money. Try to save parents before you own a home. Go on cheap dates. Really try to gamify saving money. Try to save a hundred bucks a month. Try to save 500, then a thousand. Really

try to develop an army of capital for you. Diversify. Don't think you're smarter than anyone else. The guy who took a picture of Solana up 1100% is living with his parents and is going to be broke. Diversify. Don't buy the needle, buy the whole haystack. And then finally, lean in to overcome our disadvantages as a species and let us recognize how fast time will go. You're going to be my age before you know it. It was yesterday when I bought my first shares in Columbia Pictures when I was 13 from Cy Saro at Dean Witter Reynolds at Emerson Junior High School. I used to call him every day. from Cy Saro at Dean Witter Reynolds at Emerson Junior High School. I used to call him every day. That was 40 years ago. But because I started buying stocks 40 years ago, I've had some big wins. But the reason I'm economically secure is I let time take over. So the good news is I know

how to get you rich. The bad news is the answer is slowly, but you will get there. Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Levoy. Our researcher is Emily Holmes. Do you need some money rehab? And let's be honest, we all do. So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at Money News and TikTok at Money News Network for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself,

which is the most important investment you can make. you