Prof G Markets - Even Nvidia Can’t Rescue the Market From the Fear Cycle

Episode Date: November 24, 2025

Scott Galloway and Ed Elson unpack the fear cycle that gripped the markets before and after Nvidia’s earnings, exploring what’s fueling investor anxiety. They then turn to Guochao, a rising patriotic consumer movement in China, and examine its implications for American companies. Finally, they discuss whether college remains a sound investment, and what new graduates can do to improve their job prospects. Subscribe to the Prof G Markets newsletter  Order "Notes on Being a Man," out now Note: We may earn revenue from some of the links we provide. Subscribe to No Mercy / No Malice Follow the podcast across socials @profgmarkets Follow Scott on Instagram Follow Ed on Instagram and X Learn more about your ad choices. Visit podcastchoices.com/adchoices

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But with LinkedIn ads, you can know you're reaching the right decision makers, a network of 130 million of them, in fact. You can even target buyers by job title, industry, company, seniority, skills, and did I say job title? See how you can avoid the void and reach the right buyers with LinkedIn ads. Spend $250 on your first campaign and get a free $250 credit for the next one. Get started at LinkedIn.com slash campaign. Terms and conditions apply. Today's number 75,000 miles. That's the average distance an adult will walk during their lifetime,

the equivalent of traveling around the world three times. Ed. I had a cat. I took care of a neighbor's cat for about a week, and it would just look at me as if I had asked it for a ride to the airport. I'm not sure what that joke means, and wonderful at the same time. It's true, cats do look at you as if you've asked them for a ride to the airport.

You know, I'm just very used to the sex jokes. It really caught me off God, and maybe that's a good thing. Maybe that's the humor in it. But don't they? They sort of... They do, yeah. But, I mean, animals. don't convey that much facial expression.

I forgot you're a dog hater, but seriously, cats, but there's some nuance here. They look at you as if you ask them to take them to the airport and they're not really good friends. Like, wait, you're asking me to take you to the airport? Do you take people to the airport? Do you go to the airport to pick them up? Or do you take them to the airport?

Well, that doesn't really happen anymore. It's all Uber's now. No, it does with people with good men. It does. Believe it or not, people still do that. I don't really pick people up from the airport. But I'm not sure I've ever done that. Maybe you're right.

Maybe I am in polite. I met this woman and she said her girlfriend was coming to town. By the way, this isn't a joke. It sounds like I'm setting up a joke. Yeah, I was going to say. And she said, oh, I got to get out of here. I'm headed to JFK to pick her up. I'm like, you go to JFK to pick up your girlfriend?

Wow. And I'm like, I was just like blown away by that. People still do that. On cats, do you want to hear a fun fact about cats? Yes. If you die in your apartment, they'll eat you? They will eat you, yeah, within 24 hours. So dogs will wait and they'll try to wake you up until they'll start to starve.

Dogs will die with you. No, eventually they actually will start taking a nibble, but they'll really try not to. Cats almost immediately as soon as you die, they'll eat you. I like that the president is acting so guilty, and I love to, he reminds me of my, I think I remember where he told the show, when my 15-year-old was five, he wrote on the wall, and then he figured out he'd spelled his name on the wall at that moment. That's the look the president has right now.

Or my great day and Leah, I can tell she will refuse to look at me in the eye when she's done something wrong. So I'm like, okay, she's peed somewhere, and she doesn't remember where, and I've got to search the fucking house for the pee, because she's clearly done something wrong. Anyways, so the president's acting like my great day when she's peed somewhere and can't remember where. She could not, he could not look more guilty right now.

100%. Beyond politics, what is your Thanksgiving plan? I'm pretty excited to take a, we're taking a brief break from the show. Well, that's not going to get my second Ferrari. So true story, back at L2 when I was working really hard and scared because I just had these off. dependence called children, me and a woman named Maureen Mullen, who now, I think, runs direct-to-consumer at Nike, we used to go to Europe on the Wednesday night at Thanksgiving because we saw it as an advantage to try and lap the competition domestically by going

and serving our European clients on Thursday and Friday. That's how out of control we were in terms of working hard. I think that's ridiculous. Next to Halloween, I think Thanksgiving is my favorite holiday. No religion, a lot of food. The question stands. What is your plan? Honestly, I have no plan. I've been on the road the last two and a half weeks, and I just want to hang at home and do nothing and be with my boys. Yeah, well, that's a pretty good plan. Oh, we're going to do one of those Thanksgiving for Friends things,

which is usually some very rich dude who wants to show off his crazy house to all of his friends. But it's nice. It's nice. What are you doing, Ed? I'm going to Connecticut to visit my girlfriend's family. Uh-oh, rut row. Oh, Ed. Yeah.

This is what you're going to do. They're like, I don't like this guy. He's not good enough for you. How much money do you make? And you tell him, they're like, welcome to a family. You're going to your girlfriend's place in Connecticut. Yeah, it'll be very nice. This is pretty boring.

Scott, you're one of the worst small talkers I've ever met. Did you know that? I think the word is cringe. I think the word is cringe. If the small talk doesn't blow you away with some profound insight, you're disappointed. Did I tell you met Larry David? I did. I heard.

Oh, sorry. I talked about that. That's literally the highlight of my last, like my entire book tour. That did blow me away. Yeah, we heard that. I get to the headlines. Okay. For most of November, investors were on edge as weariness about the AI boom grew.

Invidia fell 11% in the first half of the month, dragging the NASDAG down 5%. Then last week, the anxiety heightened ahead of Nvidia's earnings, with the major indices enduring several days of declines. Then the numbers came in, and that anxiety evaporated overnight. Invidia crushed it again with record revenues, record data center sales, stronger been expected guidance for the fourth quarter. Those earnings lifted Invidia, they lifted the chip stocks and the entire NASDAQ, and it seemed for a moment that AI would live to fight another day.

But the rally was short-lived. By noon the next day, Nvidia gave up all of its gains, as did the rest of the market. In less than two hours, the S&P erased around $1.5 trillion in market cap. That is larger than the entire stock market of Italy. a specific headline that triggered this decline. The market seemed to just fall. But a lot happening in terms of the AI economy here, Scott. So we had a lot of fear, a lot of negativity, which we can get into. Then Nvidia reports earnings, massive beat. We think that AI is going to go back up. And then basically within 24 hours, we are back in the red. Scott, your reactions.

I think essentially America and the economy is experiencing a giant sigh right now, because as we've pointed out, America is essentially, and the economy is now a giant bet on AI. And the narrative, it felt like the narrative just in three weeks, you probably don't notice as much because you're talking about it every day. But if you were to look at kind of the narrative or the vibe, if you will, a month ago on AI, it was definitely AI boom. And just in a short 30 days, it went from AI boom to AI bubble. And it kind of goes to what Josh Brown and Andrew Ross Sorkin say, and that is the smarter investors have been optimists constantly asking what could go right, because a lot went right. I mean, these guys were just not when this whole notion of an AI bubble, the industry said, hold my beer. Invita beat on the top and bottom line, you know, and then took up its guidance. And as a result, all, you know, all boats lifted, not huge gains. But it felt as if the market was just jonesing for a sign of the bubble popping, and they just didn't get it. These numbers were really solid. Now, I don't know if it's a lag.

I'm sure if you look hard enough, you can find reasons to stay pessimistic. But, you know, I didn't see it. The cash flows are still really strong. You've done some really interesting, I'm going to call reporting commenting on how much, well, you're not a journalist. I agree. I agree. Yeah, I mean, let's be honest. You're not a journalist.

Yeah, which means you're not about to be laid off by the Ellison's in the next 90 days. The one that you've pointed out that's interesting that people are worried about is the debt loads or the debt levels being taken on by Oracle and CoreWeave. Oracle's capax is supposed to reach 138% of its operating cash flow next year, and it doesn't expect to reach profitability until 2030. And then the price to protect against the company's default on its debt for a five, for a five, years, it's tripled in recent months. So, and by the way, I didn't, you know, credit default swaps are essentially a financial contract where one party pays a periodic fee to another party in exchange for essentially insurance or protection, if a particular borrower, a company, country, et cetera, defaults on

their debt. And my understanding is those prices have dramatically accelerated for Oracle, meaning that fear around their ability to pay off their debts or the likelihood, the market believes the likelihood they might default based on the additional debt they're taking on is increased substantially. Probably the most important thing you said there is what's happened in terms of the narrative. I've noticed this too. Yes, I'm very deep in the weeds talking about it every single day, but it's definitely true that the sentiment and the vibe in the markets right now as it relates to AI has completely

shifted compared to 30 days ago. And that sounds very kind of wishy-washy to talk about. But ultimately, it's kind of everything. I mean, the way the market feels about things, the way the market, the way the vibe is, whatever the vibe is in the markets as it relates to AI, is going to drive the portfolios of everyone. I mean, as you've said, America is a bet on AI. So it is striking. The sentiment has definitely shifted.

I thought that maybe Nvidia's earnings was going to just keep it up and things would continue as normal and we'd continue to just be in an AI bull market and everything would be fine. That's what I was expecting. So it's really interesting that actually it has reversed in a couple of hours

and I've been trying to think what actually caused this? Like what was the moment at which we decided this is probably a bubble and there is some cause to be pretty concerned. And there's a lot of things that have been happening in the news that we can get into. The debt situation

is definitely one that we should discuss some more. But ultimately it seems as if there's just it's a plurality of people who feel worried. And we've been talking about for the last several months, the headlines that we've been seeing and the fact

that more and more people are saying, there might be a bubble, there might be a bubble. I'm a little worried I'm a little worried. None of it seems to do anything to the markets. Something happened this month in the past couple of weeks, and no one can pinpoint exactly what. And all I could sort of surmise is, like, maybe it's just a plurality of people who feel this way now.

Maybe enough people read these headlines, enough people looked at the CAPEX projections, looked at the borrowing projections of some of the more vulnerable companies, like Oracle, like CoreWeave. More and more people are looking at it. and now we've reached a critical mass. And now we're seeing that the fear cycle is taking hold and people are generally speaking a little more fearful

than they were greedy just a month ago. So the psychology here is confusing and interesting. And also it's almost everything. Like trying to get a gauge of like, how does the market feel about things? That's pretty much all we're working with here. It's hard to predict the future, but generally speaking, you know, what happened in the late 90s, I'm still, I'm still holding

to this bubble thing. When people got worried, there was an acceleration, and then it all fell apart. It'll be really interesting to see. So this morning, stocks were way up, and then they've given back their gains. I think the market is looking for a reason to take these things down right now, but it didn't get them. It just didn't get it in the earnings yesterday. I was almost thinking it was the opposite, it was because we saw such a giant increase in the after-hours trading after the invidia earnings, that the market was looking for a reason to believe it's not a bubble, and that was kind of my takeaway. And then it's, it is so funny. I think you're probably right. Actually, no, the opposite has happened, but it's very hard to sort of read the tea leaves

on the after-hours trading and how it's sort of translated into what we're seeing in the markets today and this week. But, you know, just going to the earnings themselves. I mean, incredible earnings, beat on pretty much every metric, record revenue. They're projecting, I think, $65 billion in revenue for next quarter. I mean, it's unbelievable. Yeah, they took their guidance up. Took the guidance up. Now, I think the question for investors has been,

are we in a bubble and is this sustainable? And therefore, the question you have to ask after those earnings is, do those earnings, does that report tell us that there is no longer a bubble? Does it mean that this AI implosion question has been put to bed? And the reality is it doesn't really. It actually doesn't really do much to address the underlying concern. The underlying concern isn't that there isn't enough demand right now for AI. We all know there's a ton of demand for AI right now. We see it in the earnings and we've been seeing it in the earnings every quarter. The concern is that the demand that we're seeing is all coming from the same small set of players who are all

recycling each other's revenues, reporting those revenues on each other's earnings, and then at the same time, borrowing huge amounts of money to finance the whole operation moving forward. That's the concern. And the question then is, you know, is this sustainable over the long term? So this earnings report didn't really do anything to address that concern. We are still seeing those same small set of players who are keeping the whole thing afloat for companies making up 60% of Nvidia's total revenue. So I think to the bears credit, the people who are selling after this, I think if you believe that we are in a bubble, if you believe that we are due for some sort of correction, implosion, or crisis, yes, Nvidia had a good quarter, but that doesn't contradict the

fundamental belief that the demand we're seeing is somewhat artificial and therefore unsustainable. I think the thing that's scary here is that just when you're talking about these high-flying stocks, they always have a pretty significant decline over a 12-month period at some point. Tesla was down 67% in 2022. InVIDIA lost 53%. Amazon was down 53% in 2022. So the thing that is scary about this is not the individual. performance to these companies, it's that our economy has become more fragile. And that is, and again,

my theory about how this all unwinds, which means something else will hit us because it's always a shit you're not expecting. No one was expecting 9-11 or COVID, is that if these companies, you know, open AI, traditional company, we're not using AI as much, we're scaling it back, open AI, goes down in the private markets, decides that they're not going to live up to these amazing or quote-unquote hallucinogenic increases in CAPEX, NVIDIA tanks. But if NVIDIA registers what the majority of these companies eventually do, and that is a decline of 60 or 70%, that it represents so much market cap right now,

and we've become an anti-fragile or a fragile economy demographically, and that is the wrong 10% is responsible for 50% of the spend. you would much rather have from 20 to 80 percent, the middle class is considered the middle three quintiles. So that is, what is that? That's from 20 percent to 80 percent. If the 20 to 80 percent represented 50 percent of purchasing power, which they probably do, or a little bit less, that's bad, but they're robust in the sense that if there's a chill in the stock market, they might take their spending down three or five percent, but they're not going to take it down. 50% whereas the top 10% who are now responsible for 50% of consumer spending, which is really unhealthy, and they base their confidence to be clear off the market. And if Nvidia goes down 70% and there's a $3.5 trillion destruction in the market, there is, I mean, there's no way you're not going to see a substantial decrease in spending across the 10%, which, and they can take their spending down massively. So I feel like this is a structural issue as opposed to a or a

macro issue as opposed to an individual microissue with these individual stocks, we've just become too vulnerable to a certain sector. And people would say, but that's a function of the fact that they're so successful. I remember freaking out about at one point in the early 90s when I started a strategy firm, Levi-Strausson company was 50% of my revenue. And my board said, you know what? The good news is that they're such a huge client. They're 50% of your revenue and you have the capital to reinvest in diversifying. What I would argue, though, is that the U.S. in terms of our tax policy and especially the White House has said, no, no, no, make the economy more fragile and continue to suck more regulatory capture and capital and CAPEX into a smaller number of companies. I don't think they are developing economic policies that make our economy, quote unquote, more anti-fragile. And I think that's what the bulls kind of miss. It's like we are more dependent and more reliant on a small handful of companies than ever before, which means that we're more dependent and more reliant on a small handful of leaders.

the people who are making the decisions at these companies than ever before, which means that the decisions that these leaders are making at these companies is are more important than ever before. There is so much responsibility that lies in the hands of these tech leaders, of the leaders of Amazon and Microsoft and Google, and yes, Open AI, Sam Altman has a big, big responsibility to shoulder right now because of how entrenched his company and his business has become in the larger stock market returns that we've seen, which is why the debt accumulation that we are beginning to see and that has really come to light in the past couple of weeks is very concerning. And we're seeing a lot of fears bubbling up in the markets. We're seeing it in the

credit markets now. And there's a lot of nuance here that we can debate. But the reality is right now, tech companies specifically are borrowing record amounts of debt to build these AI data centers. $1.2 trillion in AI-related debt has been issued. I mean, these AI companies, they're borrowing more than banks are right now. So far this year, Google, Amazon, Meta, Microsoft, and Oracle, they've raised more debt than the previous three years combined. So this is like a record year for debt issuance. And it's all because of AI. And this is something that we flagged.

We said that this was bound to happen. We said that this was basically the next phase in the correction cycle. Every correction, every crisis, as Andrew Ross-Salkin has told us, it always features some level of debt, and that's what triggers the sell-off. And again, there are nuances,

and it's perhaps not as duma as many people believe. But, you know, this is dangerous. And some of these companies, like Oracle, like CoreWeave, are actually playing with fire. And it would be okay if these were just kind of small companies that no one really cared about. But the reality is, like, we are more financialized as a nation than ever before. Everyone is riding on AI at this point. We're more concentrated in tech and AI than ever before, which means that actually these decisions do deserve an intense level of scrutiny. And we shouldn't just say, oh, well, Larry Ellison.

and Sam Altman are smart people and these tech geniuses, therefore, you know, they've got it under control. They could make mistakes, and we've seen people make mistakes before. This feels very similar to 2006, 7, and 98, 99. And what I've seen, and that's not to say it won't happen again, is that the markets continue to climb this wall of worry.

They continue to, like, it's a bubble, it's a bubble, and they continue to grind up. And then there's what I saw in 07 and 99 was you started to see articles about it's a new age of productivity and the economy is being reshaped and recalibrated. In other words, like we've gone to a new efficient frontier, a new frontier of a new economic model and it's different this time. That's when you look out below. And by the way, it's about the time that a guy like, I forget his name, Michael Burry, is that it? Julian Robertson threw in the towel in 97. He's like, this market makes no fucking sense.

I'm out of business. My understanding is Michael Burry has lost so much money that he's had to close his fund. Yep. And so the bears just get creamed and they get cleared out. And then when everybody, and then the articles that I remember right before the crashes, well, maybe the Internet has taken us to a different age. And maybe, you know, there's go-go a concept. I mean 07 can continue. About the time the bears throw in the towel and say, okay, I give up is when you see a lookout below. But it feels like in terms of the narrative arc, we're at the point where stocks continue to climb a wall of worry, if you will.

And by the way, I thought that after these Nvidia earnings, that these earnings would be that moment where they report the earnings and everyone goes, oh, no, it's fine. Like, look, invidia's crushing. Look at all how stupid the bears look. Look at Michael Burry. What an idiot. He had to return all the capital to his LPs. Like, I thought that this was going to be that moment. What's interesting to see is actually it's not quite played out that way because the markets are now declining were back in the red. So I'm not exactly. sure what to make of it. But it does also go back to the thing that we've discussed before, which is every time this happens, you need a triggering event. You need a cast list and it needs to be an explosive cast list. We just haven't really had that. Like, everyone is recognizing what is happening, but we haven't seen any sort of implosion that would actually trigger the real fear that we're kind of talking about here. But I do think that it is bound to happen. And again, I do think it goes all the way back to leverage. We talked about those two companies.

I mean, when you think about, like, which companies go down, it's kind of a simple distinction that you have to make, and it's like which companies are borrowing irresponsibly and which companies are borrowing responsibly. Now, when you look at the big tech companies, when you look at, like, Google, Meta, Microsoft, Amazon, they're borrowing a ton, but they make so much money. They have such insanely large,

cash flows, as well as huge amounts of cash already on the balance sheet, that it's actually not irresponsible on like a debt to EBITA basis. Like, they're borrowing, the numbers are large, but relative to the money they're bringing in, it's not that crazy. So I think that's important for people to understand. Like, I don't think that those companies are that exposed to a correction. They're certainly exposed because they're in AI and they're investing in AI, but they're not going to get wiped out in a big way. The two companies that are so exposed, and we're beginning to see it reflected in their stocks are Oracle and Corweave. These companies are literally playing with fire from a debt perspective.

You've got Corweave, which has $14 billion in debt on $5 billion in revenue. They're levered up seven to one debt to EBITDA. You've got Oracle, which has levered up four to one debt to EBITDA. Their cash flow negative, they got more than $100 billion of debt outstanding. These are two very obviously exposed. companies that are perfectly positioned to get eviscerated if we see any sort of downturn, which is what we're kind of expecting is going to happen. We're expecting to see some sort of correction at some point.

And so the question becomes, okay, which are the companies that you don't want to be holding if that event materializes? So that's one point is we've got to distinguish which companies are okay and which companies aren't. And then it brings us back to OpenAI, which is the other obvious question mark in the AI story right now, because they're at the center of all of this, but the trouble is they're private. So we just don't really know what's going on. Like, we know that they've taken on some debt where they had this $4 billion credit facility, but we don't really know much beyond that. And then Michael Burry has been bringing up a very interesting point, which is like, who is their

auditor. Who's the firm that is like verifying their financial disclosures? Do we know anything about them? And this has sparked another big conversation, which the Financial Times is now looking into. They tried to find the auditing firm. They didn't find them. They did find their accountant, and the accountant was this very strange firm that no one's ever heard of. They looked at the website, and it's bizarre. They literally just have like a street address and a telephone number. And then the Financial Times called this firm, and they said, Can we talk to someone and they said, sorry, no one's here. No one can answer your questions.

Sounds like it might be the same firm that Madoff used. One thing I'd like to get your reaction to, so Michael Sembless kind of talked about it a little bit when we talked with him. But, you know, as I said, those, these big tech companies, they're issuing a lot of debt, but it's not totally crazy. But the one thing that is very strange and concerning is this SPV trend. And that is in some of these debt deals, what these companies are doing, are they using these special purpose vehicles, SPVs.

The SPV takes on the debt, presumably to cover up how much debt the company is actually taking on, and then you don't have to report that on your balance sheet. So as the example that we discussed with Michael, Meta raises $60 billion to finance this big data center. $30 billion of that, half of it shows up on the balance sheet. The rest goes on the balance sheet of this separate entity that they created with Blue Owls,

capital, which is this private credit firm, which essentially means that the borrowing is happening, but we can't see where it's happening, and we don't really know where to look. We know that stuff is being funded. We know that capital is flowing into this, but because there's so much more private market activity happening that isn't being disclosed publicly, whether it's the SPVs or the private financing of these smaller AI companies, or Open AI, which is the big AI company, and yet no one knows what its financials really look like. We just have to take the word of the CEO.

That makes me feel more anxious, because it makes me think, actually, we're only seeing sort of the tip of the iceberg because there's so much obscurity and opacity in the private markets that we just don't have access to. You know, these people aren't stupid. The people issuing debt to these SPVs, they understand, you know, they understand, quote unquote, the risk.

What it demonstrates is just so much risk on capital out there that they're willing to basically finance a vehicle that enables the core company or the company that's going to benefit or do a relation with them, it enables them to create a firewall. What do I mean by that? These guys now have so much, there's so much capital out there trying to get on the AI game that they can create a separate vehicle that if that thing goes down the tubes and it can maintain its debt payments, it doesn't get to drag open AI down with it. So what it reflects is a lot of risk capital looking to participate in the company's ability to sequester themselves

from debt obligations. Now, the lesson here is the following. And someone told me this when I was very young. They said the following. They said, never sign a personal guarantee. And oftentimes, when you're borrowing money for whatever it is, a business or something, people will bring up the notion, they'll say, would you be willing to sign a personal guarantee? As a general rule, my advice to anybody would be never sign a personal guarantee. Because whenever you're taking out debt at that moment, you think, oh, this makes sense. I can handle this, so the company can handle this. But the market dynamics, so is Trump individual performance. And people of your generation just have no idea because they never experienced it, how bad things can get and how quickly

they can get that bad. And it's one thing to lose your company. It's another thing to come home and tell your wife or your husband, yeah, I'm going to have to close down my company and, oh, we no longer own our house. That Silicon Valley Bank or the people who backed my company, I signed a personal guarantee, and they get to come after our car, my, my, you know, our 401Ks, everything. And this is essentially, when I was an activist investor, I used to create SPV, And the thing about them was they are sequestered from one another. When you start a fund, all the investments are pooled and the results are netted out. What you would really like to do is have every investment be an SBV.

That way, if just any that work, those profits are sequestered from the losses of others. And that's what's going on here. It just reflects still a massive access or imbalance of risk capital relative to the borrowers. I mean, it's a huge red flag, right? It's a flashing yellow light at best. I think a lot of people seem to be kind of sweeping this part of the conversation under the rug, the debt part of the conversation, the SPV part of the conversation, the fact that it is weird, why are you doing that?

Why do you need to do that? And, I mean, we could probably get into the details of it on another episode, but the reality is, like, this is shady, and it's not a great thing that matter is borrowing and then deciding it, but this piece of the borrowing isn't something that we're going to report as a company. And you've seen that play out multiple times. We'll be right back after the break. And by the way, we will be recording an Ask the Anything episode in a couple of weeks.

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We're back with Profite Markets. There is a growing patriotic wave in China where consumers are turning away from American brands and buying local instead. At the forefront is a Gen Z movement called Guo Chow, which roughly translates to national tide. We're seeing stark evidence of its impact in luxury. Gucci online bag sales in China have dropped more than 50% compared to two years ago,

while local premium brand Songmont has surged 90% in the same period. And it's not just fashion, coffee, consumer electronics, and cars are all part of this shift. So, Scott, service level news is basically Western brands, particularly American brands, are struggling in China. We can get into the numbers in a moment. But if you look at Tesla, if you look at Starbucks, Nike, McDonald's, all of the luxury brands,

all of the iconic American brands, they are not doing well in China right now. And the deeper, more interesting news, is this Guo Chow movement, which is this pro-China nationalist consumer movement where the mission is, buy local, by Chinese, reject the Western American brands.

pair that with just the overall sentiment towards Americans right now in China, which is highly negative for pretty obvious reasons. And it would appear that basically our geopolitical relationship with China is now impacting the behaviors of young people in China and therefore consumer behavior in China and now Americans cannot, or American brands, cannot get Chinese business. Your reactions. You're too young to remember this for when I was, when I was, When I first started L2 in 2010, 2011, and we were servicing luxury brands, Estee Lauder used to joke that their products, like the moment the ship docked in Hong Kong Harbor, the product was sold. I mean, there was such a thirst, their economy was coming online, and there was such a thirst for luxury brands. And there was an entire generation of young women who would live at home, and they were making good living, and they would rather live at home, take the bus to work.

and buy a Birkenbeck. The aspirational value of Western brands was just off the charts. And essentially, China was just the, if you, just as you hear the term AI in every earnings call, if you were to go back 13 years and listen to an earnings call of Estee Lauder or LVMH, they just said China over and over and over. And essentially, the Chinese economy in manufacturing base has gone from one of being the cheapest products to innovation. In addition, there's just no getting around it.

We think we can treat people like shit, and we're like, oh, you know, we don't, these people, the young people have kind of, America's not in vogue anymore. And so the Chinese have stepped up their innovation. They don't have Tesla, but they have B-Y-D. They don't have Nike, but they have Li Ning and Anta. They now have viable competitors.

And what's always been interesting about China is despite the fact it was the second largest economy in the world, they're terrible at branding. It was really difficult to name one global brand that come out of China. They're more global brands coming out of Brazil than there were China. And now that's changing. Now, I'm a bit of a conspiracy theorist. I think that effectively the Chinese model is to take a Western brand, especially Western technology and media brand, learn everything about it, then prop up a local entrepreneur and basically legislate a regulatory. them out of business. But I don't think that's the primary culprit here. I think there's an anti-American sentiment, an increase in innovation domestically. Even what's the coffee shop that the

Chinese have that they're now opening? Yeah, luck in, lucky coffee. You can get a good cup of coffee for a buck 50. They've just come in and said, you know, we can offer a pretty reasonable facsimile of Starbucks for a lot less. And so you combine a younger generation, more innovative products, a younger generation that doesn't feel that great about America. innovation of greater appreciation or skills around branding. And we have lost, I mean, do you realize what's happened to Estee Lauder stock? The companies that were kind of living by the Chinese sort, if you will, or Starbucks, I mean, let's look at Estee Lauder. Let's look at the five-year on Este-Lotter. It's lost two-thirds of its value, two-thirds of its value. And it's a really, I would

our USALotters actually a really well-run company. It is now at, it's at the same level. It was at eight years ago. Let me give you some of the, some of the market share statistics that we have here on what's happened in China. So Nike is a good example. They used to be the market leader in China for athletic wear. Just four years ago, they had 25% market share. As of today, they are no longer the market leader. It's a company called ANTA, which you mentioned. It's the most popular brand for athletic wear in China. Nike is down to 20% market share. Anta's China business is now 30% larger than Nike's. So that's been kind of a gradual slide that's sort of accelerated in the past couple of years, and now Nike is no longer the leader. Starbucks, 2019 Starbucks had 34% market share

in China. They're down to 14%. Tesla, which we've talked about a lot, their market share. just shrank to 3%. It was down from 8% the previous month, so it's absolutely tanking. Lowest level in three years, BYD, which again, we've discussed now the leader with 23% market share. And then it's all of the luxury that we talked about.

Gucci being displaced by this company, Song Monter, you've talked about the decline of Estée Lauder in China. So, I mean, these Western brands are getting crushed in China. If you have large China exposure, and we can talk about the AI, which is a whole other story,

what's happening to invidia's business in China and Qualcomm. But they're getting absolutely eviscerated. And I feel like a big question for investors has been, why is this happening? What is the catalyst? And I think when you look at this movement, Guo Chow, and you also look at the sentiment towards America among young people, where you're seeing studies,

the younger you are in China, the more you dislike the U.S. There are plenty of surveys that prove this. It's almost like, well, we don't really need an explanation. Young people hate America in China, and that's why they're not buying their products. Young people in China hate America. Young Americans in America hate America. I mean, we're clearly not doing something right. And look, I don't know if you've picked up on this.

I'm not an enormous fan of the current president. But acting like an asshole to ever. Everyone all the time, eventually it's going to bubble up in terms of consumer preferences. Also, you just have a bunch of companies who are going to say, all right, we don't know how to plan against this guy. We're going to focus on domestic innovation and investment in domestic supply chain and trying to figure out a way to develop front-end brands. We always had, you know, we always had an edge around branding. We no longer have that. in some when we stop selling them chips they have a workaround when we start creating a sclerotic

export policy for them in terms of tariffs they develop a workaround and start building their own aspirational brands i just um i think we have slowly but surely just figured out a way it's like we shoot ourselves in the foot and then we're like i know let's put the gun in our mouth uh and the reliance and i guess they didn't have any choice because they were selling so much But the reliance on the Chinese economy just became massive for a lot of these brands. And I remember a year or two years ago, I remember saying like, basically the biggest decliners in the stock market were all companies that were based on their exposure, whether it was Nike or Starbucks to the Chinese market. So they're now all in kind of retreat. We can play the blame game of like, who did this?

And, you know, I'm inclined like you to believe it was probably Trump. I mean, all of the numbers started getting pretty bad around 2016 in terms of Chinese sentiment towards the U.S. And you saw, I mean, an explosion in negative sentiment towards Americans. And also just like, if you look at Chinese media, you just saw this explosion in negative articles that was, again, state sponsored and state supported by the Chinese government. But still, the reality is like, whatever we did in the past 10 years or so has made China and its people really not like us. And, I mean, you know, you can have whatever opinion you want to have about that fact, but that is the fact. And the reality, again, is we actually rely on China's economy more than we would like to believe, especially those companies we've just talked about. I mean, China is Nike's third largest market.

It's Coca-Cola's third-largest market, too. It's Tesla's second-largest market. Half of Qualcomm sales last year came from China. Like, we can make them our enemy as much as we'd like, but then it's like, okay, well, let's recognize that actually in a lot of ways we kind of depend on them, or at least some of our most iconic companies, kind of depend on them.

So this is, you know, there's a cost here. There's a price that we pay for these pretty god-awful geopolitical relations that we are developing with China. And it goes back to what you've said about pushing them into the arms of our allies, that iconic photo that we saw early in the year between Xi Jinping, Vladimir Putin, and Narendra Modi, all hanging out and laughing together. That means something. I think we're beginning to see it in the earnings of these companies. We'll be right back, and for even more markets content,

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that 2026 could be the toughest college-grad job market since the pandemic. It is discouraging news, given that 2025 was pretty bad already. Over the summer, unemployment for degree holders ages 22 to 27 hit its highest level in over a decade, barring the COVID years,

and it is now high. higher than the overall jobless rate. So, Scott, very bad job market for college grads right now. Some of the data we've seen, we saw this survey, which said that it's the worst job market for grads since the pandemic. Unemployment for new college grads is really high right now, 9.3%. We're seeing all these mass layoffs. We're seeing how AI is threatening people's jobs.

We're seeing data from handshake showing that full-time job postings are down 16% year-over-year. not a good time to be a newly graduated young person in America right now. I guess let's just start with your initial reactions to some of this kind of alarming data we've seen. Well, we know what's going on, right? It appears the ground zero for efficiencies, which is Latin for layoffs of AI, is sort of low-level information work, which kind of spells recent college grad. And I think of the work I did at Morgan Stanley as an analyst. It just feels like a lot of that can be done by AI right.

now. And so far, at least those terms aren't reporting big layoffs because they want to train people. They're just trying to make them more productive and the economy is still pretty strong. I just don't think there's any getting around it. The numbers are bubbling up where a lot of these big tech companies who have naturally and obviously been the first to adopt or really severely lean into AI are just not hiring as many people. So I think this is part of the natural cycle. Again, I don't want to say I don't feel sorry for them, but I'm like, you know, call me when it's, call me when 60% of you don't have job offers, and that's what a real recession looks like, right? It's the notion that it's a recession when your neighbor doesn't get a job. It's a depression when you don't, when you lose your job. But the question comes down to this, is college still worth it? And that's probably the number one question I get an office hours and via email, and a lot of it is situational.

If you don't have a lot of money, your family doesn't have a lot of money, you don't have a lot of and you get arb down to kind of a second-rate college and you're going to have to borrow a lot of money, I think you really have to be careful and evaluate your other options. If you get into Yale and you're a good student and feel like, yeah, there's a very decent likely at I'll graduate, I'd say it may even be worth

taking a quarter of a million dollars out in debt. If you're going into a field that appreciates a Yale degree, you can justify that type of debt. And I know that sounds crazy, but the strange thing is, and the really sad thing is, at a place like Yale, if you don't have the money, it's no problem. It's the second tier schools that, A, don't offer you the same upside who charge the same amount of money because we're basically price-fixing vis-a-cartel where you have to take on extraordinary amounts of debt. Like, if you show up to Princeton and you can't afford it, no problem. They'll pay for it if you just have to get in. But here's some facts that what I generally find is the people saying, oh, you don't need college, like saying it more are people who have graduate degrees from Stanford, and it's worked out pretty well for them. Bill Morrow is always like that,

and you don't need college. I'm like, you went to an Ivy League school. You went to Cornell. It seems to it paid off for you. 100%. And also, when I hear people saying to me, well, I don't know if my kids need college anymore. I usually, I don't say this when I'm thinking,

that means little Johnny fucked up the ACT and your word he's not going to get into college, and you're trying to make everybody, including yourself, feel better about the fact that Johnny's not going to get into Cal State, you know, it's not going to get into Pico Tech. And you're bummed about it. Because here's the bottom line. If you had a drug that made you more likely to make more money, less likely to have diabetes, less likely to self-harm, more likely to engage in a long-term relationship called marriage, much more likely to run for office, you are going to live six years longer. That's called a

drug. But the problem is, is we've decided to hoard the drug artificially such that we can make it too fucking expensive. And this is the problem. It's not that college doesn't add a lot of value. It's just that the incumbents, specifically the administrators and faculty of universities have weaponized the exclusivity, constrained supply artificially such that we could raise tuition two to three times faster than inflation. And that is, the Gestalt now around higher is how do I, a faculty member, reduce my accountability while increasing my compensation? And it's, I know, artificially sequester supply, reduced supply. I'm Dartmouth. I sit on an $8 billion endowment, but I'm only going to let in 1,100 people, despite the fact I'm in the middle of

fucking nowhere, and could double or triple my freshman class. I have the capital, no sacrifice in student quality. I have the infrastructure. I have the faculty. Harvard could take a couple billion of that $53 billion endowment, go to any southern state, get them to match it, and start a wonderful Harvard adjacent in the South that would have tremendous social benefit. But no, we're in the business of being fucking Chanel, not public servants. So, yeah, college is still an incredible value. The problem is, because of the corrupt rejectionist LVMH strategy that university leaderships have deployed to make alumni who want to see the value of their college certificate go up by creating

artificial scarcity, we've lost the script in terms of its value to society. And the real tragedy is the kid, the middle class kid who's been taught his whole life or his parents have drilled into him or her. It always benefits to go to college. You've got to go to college. That's the American dream. They don't get into one of these elite universities who take pride in rejecting 90, 95% plus of their applicants. They get arbed down to a mediocre university that because of a corrupt pricing cartel in lockstep charges the same amount as Columbia or Princeton that doesn't have the financial resources to give them a financial aid. So they get a meeting with a woman in a pantsuit and a big college logo behind them that reaches across and says, it never doesn't pay to invest in

yourself, just sign here because she wants that free fucking cheap credit to pay for her tuition, such as she can make two or three hundred thousand dollars a year telling young people to borrow more money every day. Do I sound angry? And then this kid who went to college and maybe wasn't ready for it emotionally or psychologically drops out after two years, but guess what? They get to hold on to that debt. The only form of debt that is not dischargeable in American culture is the debt that should be most dischargeable, and that's the one that burdens young people. This is one of the great failings, in my opinion of America, that reflects a sickness in our society that rather than loving the unremarkable and trying to create millions or tens of millions of

millionaires, we've decided we want to identify the freakishly remarkable and create a superclass of billionaires. And the people leading this charge toward a Hunger Games economy are the faculty, administrators, and alumni of elite universities. Thank you for my TED Talk. I'll be around all week. Try the veal. This does, I mean, college is pretty, it's indisputably and statistically a really good thing. And by the way, I just, I want to acknowledge something you said as well, which I think is very true, which is that all the people who are saying don't go to college went to college and benefited tremendously. Like two perfect examples, Palantier, Alex Kopp is the anti-college guy. He went to Haverford undergrad. He went to Stanford

law, and then he got his Ph.D. in neoclassical social theory. But you don't. need college. You don't need college. So he's one of the, I mean, this is their whole plan. It's like, we're going to hire you right out of high school because college, like, is stupid and it woke and it doesn't benefit anyone. Peter Thiel's another good example. He's got the Teal Fellowship.

The whole thing is like, drop out of college and start a company. I hate that. College is stupid. Meanwhile, he went to Stanford undergrad, and then he got a law degree at Stanford Law. So I totally agree with your statement where these people. love to say these colleges and universities are stupid, and yet they went to them, and it's probably because he went to Stanford undergrad and Stanford Law that really launched his career and his ability to establish connections with people and give him the

veracity and the credibility in the labor market. So that's the whole thing. However, to their point, there is a question of maybe it was worth it back then, but perhaps it's not as worth it today. And I think the data that we're seeing, I mean, we know. We know. that it's a bad job market for young people right now. I think the question is like, is it all young people or is it college grads? And the answer is kind of both. I mean, we've got high unemployment among young people, but it's getting more pronounced among college grads to the point where the spread in the unemployment rate between those

who didn't go to college and those who did go to college, yes, the employment is higher or unemployment is lower for college grads. But the difference has been shrinking and shrinking and shrinking. In other words, having a college degree based on employment rates isn't as effective or impactful than it has been in the past, which begs the question, what is the value of a college degree today? We know what the value was 20, 30, 40, 50 years ago. It was tremendous. But I think the question for young people now is we're looking at what's happening in the, AI, we're looking at what's happening in the job market. Can I rely on history and the historical

success of going to college? And will that play out for me? Is it actually worth it? It's just situational. When I went to college, it was a no-brainer. You get into UCLA or Berkeley, you go. And you're right, it's not only just about economics. It's about the, I mean, it did everything for me. It literally, the vision of the regions of the University of California and California taxpayers just saved my ass and ignited an upward spiral in my life. It's where I met my ex-wife, and although I say ex-wife, she was a wonderful woman, high caliber, high quality, just gave me a sense of pride and confidence. I had a wonderful 10 years. I had a wonderful 10 years. with her. It gave me some of my best friends. It taught me how to handle alcohol and substances.

It gave me the opportunity to get a job at Morgan Stanley, which got me into business school, which gave me the credibility to borrow money to start and raise money to start businesses. It just inspired this upward spiral of prosperity and health and relationships, and a lot of it was not economic. It was not economic. And I just think we want to offer that opportunity to absolutely as many people as possible, and also in different formats. A lot of people don't want a liberal arts degree after four years. They think, you know, I want to get a two-year degree in especially nursing or cybersecurity, or I want to meet at the age of 19 or 20, I'd really like to start working on these data centers because I understand how to weld. I mean, we've got to bust out of

this notion of shaming the vocational jobs and take advantage of the infrastructure at these universities. I'm actually very involved in one of these programs called the accelerator program, UCLA and Berkeley where we have no admissions criteria, anyone who shows up gets in, and it's nearly free, and it's a bunch of non-traditional one-and-two-year programs. But there is really a, you know, this is, America does a small number of things really well. We make the best weapons in the world. We make the best media in the world. We make the best software and hardware in the world, the best tech. We also have the best universities in the world. The problem is we have just taken the wrong approach and we monetized it and are treating it like shareholders

instead of treating it like citizens, instead of treating it like public service. And I'm picking on the president of Dartmouth. She seems like a lovely person. I was at the Atlantic Festival and she was talking about AI and education. I'm like, just letting fucking more people. Your big thoughts are awfully interesting. But why are you not letting in a ton more kids? But I think that question gets to the heart of what we're talking about. And it's the same thing that we talk about with luxury, which is like, this is more about branding and exclusivity than more people would like to admit. And like, so you can let in lots more kids, but that also kind of defeats the quiet purpose, which is we're trying to stratify the population in our

society such that people can just look at people, see a logo, see a name on the resume, and then decide, yes, you're good enough. It's a filtering system. It's a caste system. It's not a filtering system. But just you reverse engineer, let's go further down the supply chain. Public schools spend $15,000 per student. Public schools in poor areas spend $8 to 10. Elite schools, elite private schools spend $75,000 per student. So, oh, what a shocker. The average American kid has approximately $180,000 invested in their education before they go to college. A poor kid at $120,000. And a rich kid has almost a million dollars in. invested in him or her. And some people will say a lot of that money is wasted. A lot of it isn't. And what do you know? Middle income kids from middle income homes score 150 points more on the SAT than lower income. And then the real inequality is rich kids score 250 points more than middle income kids. So if we were going to have true affirmative action where we wanted the SAD to just kind of reflect test-taking ability, you would spot poor kids 370 points. And if they get a 1230,

they've got a perfect SAT score. We really have decided in the U.S. that we're a caste system and that the primary indicator of your future happiness, propensity to self-harm, obesity is a function of just how much fucking money your parents have. It is really, we have, in a lot of ways, lost the script, and universities are guilty of being ground zero for this emerging caste system, this dynastic wealth,

and this virus of rejectionism, and exclusivity, and I'm not being humble. I'm a talented, I'm a fucking monster. I'm creative and I'm hardworking. But if America had the same bullshit rejectionist strategy towards letting kids into higher ed at a reasonable cost, then that they have now, I'm sure I'd be making a great living, selling copiers door to door. I would figure out a way to make a good living. I'd have nothing like the life I have now. And all of the people my age who, who graduated from one of these elite public institutions, we have a debt. And that is to make sure that the bigger ladders are thrown down behind us, because what my generation is doing is

pulling up ladders everywhere. I think that a lot of people would agree with us at this point that it is a cost system and that it's unfair. And the fact that you go to an IV and the chances that you hit the top one percent of earners goes up by 50 percent is like unfair. And the fact that if you're rich, you have a way high likelihood of going to that Ivy League school and then we can get into all the legacy staff and we can get into the donation stuff. It's like the whole system, let's just be real with ourselves, is pretty unfair and it is a cost system. And I would bet that the majority of our listeners actually agree with us on that. I think the question then becomes like, if you're a young person, what do you do about that? I mean, we can talk on the governmental

level, how we need to reorient the system to make college education more fair for all Americans. But if you're an individual person, it's like, okay, it's unfair. It's a cost system. What am I supposed to do about that? And I would like to get your views on this. I think, you know, just starting off on this question, I think one thing that is worth recognizing as a young person is how important branding is. And the fact that, like, you know, this college application, where you go to school is largely a branding event. The education is kind of part of it, but most of it is what seal, what college seal is going to be on your resume. And so when you're thinking about where

should I go to college, you should kind of think of it in as one-dimensional, two-dimensional way as I'm describing where it's like, I should go to the college that most people, the most amount of people recognize or think is good. It's so stupid and it's so unfair, but that is what it is. And if you don't get into a college that you think doesn't hold real brand value, then yeah, you probably shouldn't be taking out debt to go to that college. You should actually be running the cost-benefit analysis in your head, like maybe this isn't worth it. It would be worth it if I would go in Harvard or Yale or Stanford, or, I mean, a great school that isn't an Ivy school, but if it's a middle to lower tier school, like probably not. That's the first thing I

would say. I have another thought, but I want to pause there and get your reaction. First off, an honest evaluation around and not shaming or shaming yourself if you're not cut out for college and should consider additional training for some sort of vocational job. Those jobs are just going to pay really well for the next 10 years. We need 500,000 more plumbers and more electricians. So if you have any aptitude or desire for vocation, job. If you have the opportunity to be scrappy and try and find a small business, there's going to be millions of small businesses owned by baby boomers that have no succession plan because they're kids who probably grew up wealthy. No fucking way, I'm taking over dad's curtain-hanging

business despite the fact that dad has made $600,000 a year for the last 20 years. There are opportunities, and I would suggest that young people think creatively and be very honest about whether they're cut out for college. And what you need is a kitchen cabinet of smart people to try and advise you. If you're one of those people, and I think there's a lot of them who would benefit from college, then there's a few things you should be thinking about. One, I mean, okay, it's passe, but do your best and be very strategic about trying to get into as many schools as possible, because what brings down prices is competition. And what people, students do, is they think these are such strong brands. They dream of going to Indiana. They get into Indiana. That's it.

No, apply to DePaul, apply to the University of Florida, apply to, you know, Kenyon. Because once you're in four or five schools, once you're admitted into a school, they play the game of now they really want you. It goes from being a sell to a buy. Do what consumers do, and a lot of freshmen don't consider doing. Go to each of them and try and play them off of each other and get as much financial aid as possible. Hi, I got into Syracuse. I would like to come to Syracuse, but I also got into McGill. I also got into Fordham, and Fordham's offering me a 50% ride. Can you match that. You'd be surprised how many of these schools are willing to pull out their checkbook to try and increase their yield. The other ARB, if you will, is to say, all right, maybe I'm not

quite ready for UCLA, but I'm going to go to SMC. I'm going to go to Santa Monica College, or I'm going to go to OCC Junior College, which are much less expensive. And what the schools do a really good job of, a really good job, especially the big publics, is taking kids in who are transfers from junior college. Because if you can do well at SMC for two years, it says you know how to survive at college and that you're going to graduate, and they are very committed to letting those kids in. A lot of the freshman class or a lot of the incoming kids into these universities, whether it's a UVA or UCLA, a UCSD, a UC Irvine, are kids from junior colleges. And essentially, you cut the cost almost in half, at least the tuition, because junior colleges, especially the great

Cal State system, which isn't a junior college, but the junior college system in California is really, relatively speaking, inexpensive. But be all over your college counselor, find people who will coach you around this stuff, be very transparent, be a consumer, trying to get into as many schools as possible, play them off, play those bitches off on each other. I'd really like to come to your school, but I'm getting more money at this place, because what happens is kids have a tendency to fall in love with one school. And then they have absolutely no choice. The early decision thing, the early decision, have you heard about early decision? Yeah, but it's fine. For the listeners, you can pick a school and go early decision,

and the student and the parents sign something saying, if I get in here, I'm going, right? And all your other applications are automatically withdrawn from Common App. It's a total fucking racket. It should be illegal. Why? Because they dangle the, not 10% of you will get in, But 20%, and they never validate those numbers, will get in on early decision. But then, guess what? Syracuse finds that they're a little bit short in their freshman class, and they send out additional financial aid offers to the people who are undecided. The people who went ED and have to go reach out and say, hey, I heard you're giving everyone

$10,000 off. And they say, fuck you, you got to come here. You went ED. So you have no negotiating powers. So they are leveraging the exclusivity against the above bullshit caste system to try. try and reduce all negotiating leverage and consumer leverage and pricing power among the buyers. Yes. So before we wrap up here, the other thing that I think makes college worth it, and this is

aside from vocational training, where you're specifically training yourself up to take up a specific skill and get into that profession. Well, we're talking about liberal arts. I think the two things that are really important and what make it worth it, one is the branding, and two is the connect. It's the relationships that are established over the course of your time. And you talk a lot about this, and I think it's very true. And I think it needs to be talked about more. But just some of the data here that supports this argument, 70% of jobs, this was a study, 70% of jobs are filled

via networking. And if you get a referral to a job, i.e. you know someone, you are four times more likely to get hired. So if you're worried about the job market, I'm not. going to get hired. If you know a lot of people and they're down to go to bat for you, you are going to get hired. And then this is the final stat, which is my favorite stat, and it's the stat that you will be telling your son when he's in college, I believe, next year. This is a Gallup poll which found that more than half of grads who are in a frat or a sorority have a job immediately after graduation. And for unaffiliated grads, that number drops down to a third. In other words, if you have friends, if you're

in a community like a fraternity, you are more likely to have a job after college. I mean, you're just, you're so bang on, and that is, and I don't have the analysis, but I would venture that if you're not planning to go to grad school, I mean, the best thing to do is to get A's and have a lot of friends and be really social. Most people aren't talented enough to, or a lot of people aren't talented enough to do that, I wasn't. If you had a choice between getting all A's and, quite frankly, just studying all the time and not being that social, or getting all Cs and having a ton of friends, I think a stronger indicator of your success

would be to get all Cs and have a ton of friends. There was a study done on, I think they're called Baker Scholars, and that is Harvard. The top achievers academically at Harvard gets something I think called the Baker Scholarship. And they did an analysis of them, and they found that they were statistically less successful

than the average Harvard grad, because they were sequestered away in some library, basically getting all A's. And my advice, jokingly, not to college kids, when they say, can you give me any advice about college? I'm like, well, I wish I'd just studied a little bit more because a little bit more I could have gone from a 2-2 to a 3-2. It just wouldn't have been that much incremental effort to get all Bs instead of all C's,

Ds and Fs. But generally speaking, my advice for anyone going to college would be drink a lot and just make a shit ton of good friends. Have girlfriends. Learn what you like. Learn how to be a boyfriend. Learn how to be a good friend. Have a great time. I was on the phone last night with two of my sophomore roommates. We have almost nothing in common as grown men, except we love each other because we had this great experience together when we were in the room of the 80s, which is what we called, amazing name for a room, a fraternity room. Back in 1983, we've known each other for 42 years. We're totally different. And we all are really close and look after each other and help each other and give each other opportunities and support. It's just such an incredible, incredible asset. And let me just go back. I used to, you know, when I'm a quote unquote a professor of brand strategy, the kind of the easiest way to assess a brand relative to its competitors or just how much brand equity involved is margin. Margin is a rational behavior. I'm wearing a watch that costs $1,100,000. to make. It costs me $11,000, whatever, 90 points of gross margin because it's irrational. I don't wind it. It's not a timepiece. I think it makes me seem younger and more Italian and more masculine, which are stupid emotional attributes. Italian's a new one. Oh, Panorai, Italian, Italian submariners.

I just usually hear younger, more attractive. Sorry, continue. By those, well, let me ask you this. What is the tuition now at Princeton? It's 65. It costs them very little incremental tax. There's a lot of fixed costs. Those buildings, those tenured faculty, all those administrators, that shit's expensive. Well, half of it's donated, so that's the other good thing for the margins. But the incremental cost to deliver an additional seat to Ed Elson, they're getting 90, 95 points of gross margin on you. Can you name any other product in the world that has a $260,000 price tag with 90 plus points of gross margin? I want to say a sports car, but I'm going to guess the margins are way smaller. What? Let's look at Ferrari. Ferrari, the gross margins are like 50 points, 55 points,

are nowhere near 90 or 95 points. These are the strongest brands in the world. And unfortunately, the strategy for their branding is exclusive. But anyways, I've beaten this horse to death. Ed, let's move on. Okay, let's take a look at the week ahead. We'll see earnings from Alibaba and Dell. Some delayed data will come in, including retail sales and business inventory. is for September. We may see the personal consumption expenditures index for October, though it's not confirmed yet. And finally, we will see consumer confidence for November. Scott, any predictions for us? Well, my prediction isn't economic, but I do think it will have meta effects here. I've been reading the emails released from the Epstein files. I could not get over. There's

aberrant criminal behavior of individuals, and those people should be punished. But I think the more significant thing here that will impact America is that when you read these emails in between these individuals, the level of entitlement, the notion that they are just above any standards of decorum and the way they speak to each other, it reeks of such out-of-control entitlement and is the perfect sort of embodiment of one of my favorite sayings, and that is, the rich now feel protected by the law but not bound by it. And the bottom 90% are bound by the law, but not protected by it. And I think more impactful than the embarrassment of the president or maybe some of these people criminals finally getting served their justice, I think America is going to read these emails and say, you know what, enough. I think we're about to see a dramatic rethinking or recalibration of the social order

and I don't know how it's going to manifest, I don't know if it's higher taxes, I don't know if it's more people like Mamdani being elected, but I think these emails are going to be the turning point for American society or it's going to enter into a new cycle here where people are just fed up with, okay, let's cut farmers, soybean farmers, subsidies by $9 billion, but fine, $40 billion for Argentina. Let's cut taxes and let rich people capitalize. and ride off 100% of their Gulf streams, but we're going to take away health insurance and 14 million people. I think we've hit a tipping point, and it comes from unusual places, and I just think the vibe of these emails is going to have a much bigger impact

than we're expecting. So my prediction is the social order is about to take another turn because of what has become just noxious entitlement amongst our most fortunate. This episode was produced by Claire Miller and engineered by Benton Spencer. Our associate producer is Alison Weiss. Mia Silverio is our research leader, research associates.

Our Isabella Kinsel, Dan Shillan, and Kristen O'Donohue, Drew Burroughs is our technical director. And Catherine Dillon is our executive producer. Thank you for listening to Property Markets from Property Media. Tune in tomorrow for a fresh take on the markets. You help me in kind reunion as the waters and the dark flies

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