The Compound and Friends - Nvidia Breaks Away

Episode Date: May 26, 2023

On episode 94 of The Compound and Friends, Michael Batnick and Downtown Josh Brown are joined by Dror Poleg to discuss Nvidia's ascent, the AI explosion, the future of work, and much more! Thanks to Public for sponsoring this episode. Go to https://public.com/compound to learn more about their new Treasury accounts. Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Josh Brown are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here https://ritholtzwealth.com/advertising-disclaimers. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/podcast-youtube-disclosures/ Learn more about your ad choices. Visit megaphone.fm/adchoices

Drawer was the first and only guest that I had to cancel on because I f***ed up my schedule. Oh, we cancelled on you? I did. When I went to Phoenix. No, but also it was ages in advance anyway. But listen to this. You took it very seriously. No, because I really felt really badly.

Next week, Josh and I are going to be in Tampa. And I got my brain twisted and I thought that I was gonna have to cancel on you again because I thought you were next week. And I was like, oh my God. We would have taken you to Tampa with us. Sounds good. So I started DMing you. I was gonna like send you like a DoorDash like card.

I'm like, I'm buying you dinner. And then Nicole's like, you idiot. That's next week. Hey, I didn't call you an idiot. But I was like, what are you talking about? She implied it. She implied that you were an idiot. I am calendar challenged.

You are. Even though it should be fairly. How did you end up in Port Washington? Let's hear the story. Because you don't have a Port Washington accent. How did you end up on Long Island? Let's start there. So I grew up across the bay in Israel.

Yeah, throw these on. Right across the bay in Israel? Right. Yes. Let's start there. So I grew up across the bay in Israel. Yeah, throw these on. Right across the bay in Israel? Right. Yes. Okay. And then... What part of Israel are you from? Netanya.

Okay. It's the capital of Israel. No, I'm joking. Where is it? It's on the coast, the Mediterranean. It's kind of... It's on the Med? Okay.

15 minutes north of Tel Aviv. It's Tel Aviv, basically, but it's like a little chiller. Okay. It's like the Port Washington of Israel. All right. So how did you end up in the United States and when? So I came here. I left Israel 22 years ago.

So I've lived in China for 10 years. Oh, wow. I lived in London. I went to grad school there. I went to college in Australia before that. And eight years ago, I landed here kind of by accident. I had a startup that was kind of going hot here for five minutes. Okay. Was it WeWork? No. Okay. going hot here for five minutes. Okay.

Was it WeWork? No. Okay. That was the other Israeli guy. Okay. Do you know him? I've met him, yeah. Yeah.

Impressive. Does anyone really know Adam? Does anyone really know him? He's impressive, yeah. No, I think he is. I mean, he's a remarkable guy. He's very impressive. All right.

So you had a startup. You got to New York. Yeah. So I came here for a few weeks, And I kind of stayed for a little longer. Then I met my future wife. Well, that'll do it. Jewish girl from Long Island. There you go.

Then I lived in Manhattan. She convinced me to move to Brooklyn. And then during COVID, she dragged me to Dix Hills for a few weeks because that's where she grew up. Okay. No disrespect. Yeah, suburban life wasn't growing on me. Dix Hills East or West?

This matters. Do you know which high school? East, I think. All right. Did you ever go to Blackstone while you were out there? One of my favorite state houses. I didn't go anywhere because when I was there, you couldn't go. Plus, where could you go?

There's no sidewalks. There's nothing. Right. So, and then we kind of try to find a place. Like, I wanted to just go back to the city. She really wanted us to buy a house already I wanted to just go back to the city she really wanted us to buy a house already we looked at houses

they trick you the Jewish girls from Long Island they trick you when you meet them they live in Murray Hill they live in Manhattan and you think

it's going to be all Broadway shows for the rest of your life but what they really want is to be as close to their mom as possible that's exactly what happened I could tell you

I could have predicted all of this if I knew you I didn't know you then I could have predicted all of this. If I knew you, I didn't know you then. I could have told you where this was going. And then we kind of looked for houses near Dick's Sells. And at some point I said, listen, I just can't. I'll never live like this.

Yeah, like those animals. I agree. Shout out to Dick's Sells, all our listeners, Dick's Sells. All right, so why Port Washington? I love Port Washington. It's one of my favorite areas. Frankly, we just went back to looking for places to buy in Brooklyn. But my wife was still looking for stuff on her own.

And then she sent me a listing in Port Washington. I've never been there. I just looked at the listing. And I told her, buy this house. I don't even need to see it. It's beautiful, though. It's on the North Shore. Yeah, it's like living in Queens, basically.

I mean, 30 minutes to Manhattan by train. I can walk to the beach, walk to the train, walk to a sushi. You've got two movie theaters there. I don't think they're running. I mean, the Manhasset one maybe is running. And the Port Washington one's closed. You have a good train line. Great train.

It starts in Port Washington, so you never have to fight for a seat. And you can fall asleep on the way back. That's right. You can fall asleep, and it's not going to keep going. And most importantly, I don't really care. I don't have to come to fight for a seat. And you can fall asleep on the way back. That's right. You can fall asleep and it's not going to keep going. And most importantly, I don't really care. I don't have to come to Manhattan for anything. Okay. So you make friends out there?

I have an office in Great Neck, which I took just for fun and to be closer to even better restaurants. Yeah. We have some friends. I think my wife, who is less kind of social, actually has more friends because she's with the moms and she meets people through school.

And I'm like a hermit. Okay. But yeah, but it's nice. I have a lot of friends in Port Washington. I don't think you'd be into them. No. They're all like insurance salesmen and stuff. Yeah, I've met them probably. Yeah, probably. I don't think it's your vibe.

No, this is just- Which restaurant in Great Neck did you want to be close to? Nikkei of Peru. Oh, okay. Why? Because it has excellent sushi. Sorry, Great Neck, Grill Time. Grill Time. Sorry, okay. About Port Washington. All right,. Sorry, Great Neck, Grill Time. Grill Time. Sorry. Okay.

Fort Washington. All right. Very cool. So Michael and I are from the opposite coast. We're due south of you. And we kind of were born and raised there. And that's pretty much where we belong. I think our particular brand of Long Island is highly specific.

Yeah, we have some relatives there as well in America. Okay. Oh, very cool. You know our type. Around the Bay, yes. So you know what's going on. Yes. All right.

Well, we are very lucky to have you this week because you specialize in a lot of the things that are super relevant right now. And we're excited to get your take on all this stuff. You ready to rock? It's my pleasure. Yes, let's go. My man.

Troy, did you do something in real estate? I did. In China, I did 10 years of private equity real estate. So actually buying land, developing. Private equity real estate in China. Yeah. I think one of a handful of real foreigners, not like from Singapore or Hong Kong,

that actually, you know, it wasn't my company, but we had a platform. We bought land. We developed it. What made you think that you could do that? Going back to Adam Neumann, Israelis just kind of think that they can show up and tell people something. Can we talk about that for a second? Yeah.

So when the whole WeWork thing was at the apex of the madness. 19? 2019, yeah. September, October. So I knew a commercial real estate broker that had done a lot of WeWork deals, and he knew those guys really well. And he's just like, there's nothing that can stop them. Like if they decide they want to do something.

And then when I watched the show, did you watch the show? I did. There's two of them, but yeah. Okay. I forget which one I watched. I watched the one with Jared Leto. Yeah, yeah. Okay.

Did you meet two? Did you meet two of them? There's one more documentary, I think, and one I watched. I watched the one with Jared Leto. Yeah, yeah. Okay. They made two? They made two of them? There's one more documentary, I think, and one kind of fictional. So my friend is like, you know what's really crazy is that all these people got taken in by this concept. And like some of the most sophisticated investors in the world, including SoftBank, like were shoveling. SoftBank is not one of the most sophisticated investors in the world. Lar SoftBank. SoftBank is not one of the most sophisticated investors in the world. Largest, I should have said.

But he's like, these people were acting like they never met an Israeli before. Like his whole shtick with, we're going to use WeWork as a platform to improve the world. Like, yeah, it's Israeli guys. That's how they roll.

It's like the Zohan kind of real estate version. So what the hell is that about? No, listen. First, I think WeWork is still alive, remarkably. It's worth $140 million or something today. But it's still there. No, I'm talking more like the mentality. What is that?

Well, listen, we come from a small country. Yeah. Whatever idea we have, it's always- An outperforming small country. You guys punch way above your weight. Yeah, but it always focuses on going outside. You're not building anything local. So to begin with, you're planning to sell to Americans or to everyone else.

Okay. Second, we're giving a lot of responsibility from a young age. Even before we get to the army, Israel is actually, contrary to what you may have heard, a very safe place. Kids walk around. They take the bus on their own. They go to the shop on their own. They do stuff. They take care of each other. So we have that, a very safe place. Kids walk around, they take the bus on their own, they go to the shop on their own. They do stuff. They take care of each other.

So we have that going for us as well. And then, yes, the army thing. I mean, Adam was an officer. How does that work? You finish high school, mandatory service? Yeah, three years. Right after high school? Immediately after.

So you finish high school at 18, and then you're in the army until you're 21, and then university for some, not for everyone. Yeah. Okay. Also the army, realistically, less than half of Israelis these days join the army. Was it Russians? No, everyone.

I mean, like me as well. But like a lot of people don't go. I mean, a lot of people are ultra-Orthodox these days, so they don't go at all. We have a big Arab population, so they are exempt as well. And then a lot of Israelis, you know, they have mental issues, health issues. There's a lot of people just that the army doesn't really need. So not everybody goes, but most or half. Okay.

All right. You did it? I did it. What was that experience like? It impacted me incredibly. Yeah. But I could have lived without it. Okay.

So I could have done other wonderful things with those precious three years. What did it give you that you wouldn't have had otherwise? No, I mean, I was in real combat. I was in Lebanon. You things with those precious three years. What did it give you that you wouldn't have had otherwise? No, I mean, I was in real combat. I was in Lebanon. It was three years. People were shooting at me. I shot back at them. I saw people get hurt.

It was an insane type of life. And you also just, even without the combat stuff, you learn. You push yourself. You're in a structure. You figure out how to fit in, how to move up, how to get along with all sorts of random people that you're kind of stuck with suddenly and under very intense conditions uh so you learn a lot but again i i like to think that i would have learned something also i wonder what that's like for you for the for like the parents in that situation like you have an 18 year old still a child right to your parents you're always their child. And it's like, all right, this is just what we do.

Like, I'm going. And I wonder what that must feel like. I don't know yet. My kids are very young. But it's terrible. And my dad was actually a military guy. And still, when I was in Lebanon and I would speak to him, I could hear his voice crack because it's just insane.

Well, thank God you got through that. We're here to talk about all of the current stuff, but it's really great to have that background. How are we doing, John? Feeling good? Yeah? All right. It's a crowd going wild for you right now. Episode 94. Welcome to The Compound and Friends. Episode 94. is only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast. Today's show is brought to you by Public. Duncan, did you know that interest rates are breaking out again? No. Well, I'm here to tell you that, in fact, they are. The six-month treasury is now yielding 5.4%, which is kind of

wild. And with public, you can easily, very, very easily buy treasury bills backed by the full faith and credit of our beautiful institutions. No minimum holding periods or settlement delays or anything like that. And when you buy treasuries on public, the bills are held securely in custody at the Bank of New York Mellon, which is the world's largest custodian bank and security services company. So you can trust that they are in safekeeping. To learn more, go to public.com slash compound. We have a very special guest today. We have a very special guest today. We've been excited for this episode for a while. It got postponed once.

Our fault, not yours. But you're finally here. Dror Poleg is on The Compound and Friends today. Dror is an economic historian. He is an author. And you have a focus on how technology affects people's lives. Perfect guest for this week. Jorah has been featured in the New York Times, the Wall Street Journal, the Financial Times, and more.

And you have a new book coming out. It's called After Office, a survival guide for cities, companies, and humans. What's the story with the book? So, you know, all of the world that we see around us was essentially designed around the office. The office is the anchor of our current civilization in many ways. Both it dominates the skyline. So visually, if you would land here from Mars and you would think, okay, what's the most important thing for this culture? It's those office buildings.

But it dictates everything else. The shape of our transportation system, our schedules, how much time we spend with our kids. Even the design of our classroom. You're being taught how to sit at an office, basically, ultimately. And even after we retire, a lot of our savings are invested in commercial real estate that is supposed to give us those stable returns that allow us to live in retirement. Now, what we're currently going through is kind of the breaking of that order, which doesn't mean that offices will not exist, but a bit like the things that preceded them, like the factories or like the farms that used to kind of be the cores of the centers of our civilization, offices are going to lose that power. And then all of those things that

I just mentioned are going to have to change the way our cities are designed. This is going to take a long time for that change though. It's going to take a long time, but first it's already happening and arguably it's been happening for 50 years. And it has significant consequences and sometimes it happens faster, like in the last three years. In the grand scheme of things in your book, do you end up finding that actually this is going to be good and here are the silver linings? Or like what's your overarching premise behind what this is going to do to our society? It's going to be good because it has to be good because it's happening and we'll just have to figure out what we want to do about it.

It's inevitable, so we'll have to make it good. But it is good. I think cities are due a rebalancing away from offices and more towards just people, residences, other activities. There's no need for us to waste so much time commuting and also working in a certain way and kind of pretending to work in a certain way. There's no need for us to make tasks for ourselves. Guys, don't listen to him. I still expect you here. Hold on. So, but you would agree

this is not going to affect all cities in the same way because there are still cranes putting up glass towers, office towers in places that I've been recently like Nashville and Houston. They're still building. They're still breaking ground. It's not even building from four years ago. Houston's office market is in trouble at least at the moment. The vacancy there is high. In Dallas, it's very high.

It's higher than in Manhattan actually. So they might be building new but the old buildings are not full. That's the current thinking which is driving them to build those new offices. It doesn't necessarily mean that they're going to do so well, or at least as well as they expect. There's now this kind of talking point about fly to quality. Like, okay, the good new buildings will be okay. But that's a bit like looking at the beginning of a recession and to say, okay, Louis Vuitton is still selling well, so let's just build more Louis Vuitton stores. That's not necessarily going to be the thing.

So right around the corner from us is one Vanderbilt, which obviously they started before the pandemic. They finished it just in time for the pandemic. You actually couldn't have worse timing. But then when you hear them talk about it, it's 96% occupied or something. It's all AAA tenants, like the best of the best. Yeah, but those tenants were in place before the pandemic, probably, before it was finished. You think if they had an out right now, like one Vanderbilt. I wouldn't want to market an office building now.

But these anecdotes, I mean, they don't mean so much. I mean, some buildings are going to do okay. Some malls are doing okay in Long Island. It doesn't tell us so much about what happened to retail. At the end of the day, this market is getting hit really hard. It already did, but I think there's much more to come. We talked about, Michael and I talked about this week, there's still

a very big disconnect in the prices of the REITs, like the stock prices. Versus the prices of the buildings. Those have adjusted already. The discount now for REITs is like 60% or something. They treated those exactly like you would expect them to.

But then when you look at like, I guess, leases and all these, it hasn't really come home to roost yet. I think that's probably a function of the staggered nature of all these long-term leases. That, I mean, most of the leases that were signed before COVID have not been up for renewal yet. Most of the loans that were given out to these properties before COVID have not been up for renewal yet. Plus, the way the system is structured, it's in everyone's interest to pretend for as long as possible that the asset is still worth a lot.

You know, the owner, the banker, the government, everyone wants to pretend that nothing happened. Even the employers and the tenants kind of pretend that everyone's going to come back. There's even some companies that mandate five days at the office, but explicitly tell people that they're not enforcing it, that they can do whatever they want. So it's kind of like a ridiculous situation. So you must know people where you live that are in that situation. I certainly do. People that work on Wall Street. And the way it seems to work is the people with young kids at home get a little bit more slack, even though they're less senior. The bosses are almost like more understanding of, hey, you were really only in three days this week.

And then there's like the generation above, I guess my generation, they're like a little bit like, what the hell is this? Why do I have to be here? And these people have like this automatic out. So you could already sense the tension within these firms because it's not being enforced equally. Jor, you had a great line in one of your posters

and you said, we assume the internet was only a problem for retail, real estate. Obviously pertaining to commercial real estate, specifically the office. We didn't foresee Zoom or Google Meets or whatever, the pandemic. No, some of us did. Gone? I published a book in 2019 Zoom or Google Meets or whatever, the pandemic. No, some of us did. Go on.

I published a book in 2019 called Rethinking Real Estate that basically described what is happening right now. So when the lockdown started, were you like, see? Yeah. I was the crazy guy going to private equity real estate conferences in 2018, 2019, telling people stuff and they're like, oh, who invited this guy? And now I don't have time to see them.

Okay. I think that it's probably not, these buildings are not zeros. No. But it's probably hasn't fully dawned on people the extent to which things are not going back. Because a lot of things did come back. Everything came back. Concerts. The office. back concerts business travel has come back who would have thought

business travel business travel hospitality came back business travel is still down depending on which cities a lot of business hotels are in trouble I think the

the airlines the airlines are saying they think they got their business traveler pretty much back which I was surprised um but

same so some things came roaring right back. Broadway shows, like nothing ever happened. Like waiting lists for everything. This is one of the few things that's just not going to be that way. Yeah, and there's another issue. I mean, you mentioned those kind of really nice buildings that are still attracting people.

I think something fundamental has changed in the nature of the asset itself, which is part of the story. Those buildings that attract people now, their OPEX is much higher. They have to offer all sorts of services. They have to invest in fit-out and all sorts of stuff that they didn't want to do before. They have to give up more parts of the building

to stuff that is not necessarily a profit center. And the commitments that they get from their tenants are lower than before, are of lower quality. People want flexibility. People want to sign shorter leases. Yeah. So it's really- So 10-year leases are now seven-year leases, seven to five.

Yeah. So if it was like a treasury bill 20 years ago, now it's more like a hotel or like an operating business. That's a great point. We're going to come up in 20, our lease is up at the end of 2027. I know you're a landlord, by the way, so be nice to them. What are they called? Harbor Group.

Harbor Group. Shout out to Harbor Group. Our lease is going to come up at the end of 2027. I have no idea what our plans are, by the way, so I'm not breaking any news. But I also know that I'm not signing a 10-year lease anywhere in Manhattan because I don't think I'm going to have to. Maybe I'll be wrong, but I just don't think I'm going to have to. Yeah, I think that's part of what's changed.

Like 20 years ago, it was in everyone's interest to sign a 10-year lease. The tenants wanted that certainty, but now they don part of what's changed. Like 20 years ago, it was in everyone's interest to sign a 10-year lease. Like the tenants wanted that certainty, but now they don't. That's right. Well, you knew that prices would be higher in 10 years. Yeah, and also you kind of had an idea of what you're even going to need. Today, part of the bigger context of what's happening now in office, and that's the real hit that they're going to get, is that I think we're shifting towards an increasingly nonlinear economy

where it's very hard for us to understand how the input that we put in impacts the output that we get out on the other hand. So nobody could tell you today what they're going to need in two years, let alone 10 years. And you as a landlord, when you think, okay, maybe I'll only take public companies, but most public companies today, they lose money and they do all sorts of stuff that like, you know,

do I want to sign Uber as my tenant or General Motors as my tenant? Which one is going to be here in 10 years? I have no idea. So I have 58 people here and less than half are in New York. And I don't think I'm unique. That's just like the way we've built the business and none of it was deliberate. It's just, it just turns out that there are incredibly high quality people that we could attract to come work here. And it really doesn't matter that they're not physically here. And I think that's like almost any kind of industry that you can come up with in financial services, like any, any subset of financial services. I don't know if that's true for every industry.

It used to be you were trying to hire the best person locally. Exactly. And now we can hire the best person anywhere. And that's the most important thing, what you just touched on. And that's what I wrote in the book and what I saw coming. 2015 or so,

tech companies started splitting their headquarters, right? Amazon HQ2, Facebook, Apple, but all of them happening. And what they were doing to an unsophisticated observer just looked like business as usual, like they're opening another branch, companies always had that. But actually what they're trying to do is not recruit customers, it's recruit talent. Now there's a theory, economic theory, that explained why cities actually became more important since the rise of the internet. And the theory was that as the economy becomes more dependent on knowledge work and creative work,

that notion of matching specialized talent becomes so much more valuable and more important. So companies must concentrate in a handful of the largest labor markets because they hire from the largest possible pool. But what the theory didn't take into account was the largest possible pool is the internet. It's not New York City. And increasingly, companies are showing that preference to make those matches.

And they're saying, yes, I'd rather have everyone in the same place if I could. But if there's a tradeoff between that and hiring the best person, I'm going to go with the best person. So the pandemic sped up something that was already underway. already underway. And now if you're hiring engineers or other types of knowledge workers, and they happen to be in Salt Lake City, you're probably as an employer, all things being equal, yes, it would be great for the culture if everybody saw each other every day, but we can use tools like Slack and Zoom and we can keep in touch and we can have trips where we get people together, but I can get these really high quality people. It's a lower cost of living for them to be there. And the work that I'm putting out does not suffer in the least. And you could even make arguments that maybe it's improved by

having that diversity within a labor force. So now tell me the story of why all of a sudden that reverses. I can't imagine it ever would. I don't think it reverses. I think there might be an equilibrium one day, but at the end of the day, there's just many more options now for companies. Some companies will still want to be all in person, maybe more than ever before, more intensively.

But a big chunk of the market, yeah, I think is gone forever in that sense. Or at least the pro-office, anti-office doesn't capture that. But I think a lot of these people will be working in offices but they'll be working in completely different places the biggest casualty of of all this um those horrible midtown lunch places where you eat out of a buffet table yeah that's that's all that shit i'll always remember them hey listen to this uh this is a week ago new pandemic error ride ship record yesterday The subways recorded 4 million paid rides on Wednesday. This is from New York.

And I actually saw a kid jump over the turnstile. I was like, huh, okay. I guess people are doing that. Was it Duncan? Listen, so Carl Quintanilla tweeted, losses from New York City fare and toll evasion are staggering. Nearly 700 million in 2022 alone. This includes 285 million in subway fares. And

Dror, today you tweeted, 40% of New York City's tax revenue comes from real estate. 40% of property taxes come from commercial property, mostly offices. Yeah. So the MTA, apart from people kind of not paying altogether, there's also paying people that are just not showing up. So I think their revenue is about $2.5 billion short. So that's a political hot topic, right? Yeah. New York State already, we spoke about those talented people that can work anywhere.

70% or so of New York State tax revenue comes from, I forgot how many people, but from people, sorry, 70% of it comes from people earning $200,000 a year or more. Probably the most mobile people. Yeah, and they already moved. So the tax revenue, the tax base of New York State, I think is 14% lower than it was 2019. Yeah.

So even in nominal turn, however you look at it, the damage is there. And federal receipts are up 15%, at least nominally. So it's not like everything is down. People are moving out of here. Well, New York is a net loser of population.

But of really rich people, of affluent people. There's a scene in one of the last episodes of Succession where the techno Viking is like mocking Kendall Roy.

Oh, I know that scene. Like, is there anything to do in this shithole? They were in New York City. is there anything to do in this shithole? They were in New York City. Is there anything to do in this shithole town? And they have this, like, mini debate about New York

and he's basically like, nothing happens here that doesn't happen everywhere else. Yeah, but he hasn't been to Long Island. He hasn't been to Long Island. That's a good point.

All right, very interesting. We're going to talk about the biggest story of the week, maybe of the year. NVIDIA, which you own shares of. I do. I own. Michael missed out. I own AMD.

Really? Not good enough. I don't, actually. So we're recording this on Thursday afternoon, and NVIDIA, I think, is up $200 billion in market cap on the day. I think is up $200 billion in market cap on the day. The previous record for one day market cap gain was in Microsoft, 190 billion one day, something like that. NVIDIA is not as big of a stock,

but it's now approaching a trillion dollars. It had 27 analysts raise their price targets today and three upgrades. The first thing that I saw on the numbers was $6 billion in revenue or something like that and projecting 11 next quarter. So I was like – wait. Huh? Whoa. And so they were expected – so before they upped it to 11, I think they were at $7 billion.

So they were expecting 7. They upped it to 11. And there you go. The stock's up 30%. I saw price targets going from $300 to $600. Yeah. And these are people that had buys or neutrals on the stock. I want to just read a couple of these quick analyst comments,

and then I want to hear your take on what went on today. This is Ruben Roy at Stiefel. NVIDIA's recent momentum continued. NVIDIA remains in the sweet spot of AI infrastructure. Wallet share as buildouts of accelerated computer networks continue as the company's data center numbers grow. Questions about the supply, blah, blah, blah. Who cares?

That's not a good one. Let me do this one. This is the guy from Citi. Raised his target to $420 from $350. While we had raised our target price and estimates into the earnings, generative AI upside was bigger than we expected. NVIDIA expects data center sales to roughly double in the July quarter, driven by generative AI demand from CSPs,

that's cloud service providers like Amazon and Microsoft, consumer internet companies, and accelerated computing in enterprises. NVIDIA estimates only 4% of the $1 trillion data center CPU installed base over the last four years has been GPU accelerated,

implying AI adoption remains in the early innings. So the story basically is like 95% of the cloud infrastructure we have is just not good enough. Do you buy that? I buy that. I mean, listen, the multiple on the stock is crazy.

Yeah, no, it's only 9 million times earnings. What's the problem? But I think in terms of, I look at it the stupid way. I literally have a going reminder every day. I get a reminder, sell NVIDIA. Sell your NVIDIA. And every day I kind of ask myself, okay, is today the day?

And then I don't. How long have you been in stock? Probably two years or something. Okay, not to brag. But most of the stuff I bought, you know, the last few months. And it's still, I mean, it grew a lot, but it's still a small share of my portfolio. I'm not like all in on it, but it's a big chunk already. My friend, Paki McCormick, shout out Paki,

wrote a great piece a couple of months ago called Intelligence Super Abundance. And I think that's the story here. I think intelligence is going to be embedded in so many new products. It's going to touch so many work processes. I see it already happen with me. I'm addicted to it. I use it all day long for my writing, for emails, for work, for automating tasks, for generating images.

And most people are so far behind in terms of starting to even use what we have now, let alone stuff that will be invented in two months or in two years. So I see the only cap here is really how quickly they can produce and geopolitical stuff. But I look at it in the dumb way just in terms of pure market cap. In this market, in this country and financial environment that we live in, a company like this is still worth less than a trillion dollars. Can it be worth $5 trillion in five years? I think it has a decent shot.

It's now in that category with Tesla. It's almost a trillion. It's like $9.5 trillion. It's now in that category with Tesla where It's almost a trillion. It's like 950. It's now in that category with Tesla where it's like, well, what is this? You know, because it's like, it's more than just chips. It's the whole software platform. So they talk about Tesla as like this platform for continued

innovation in robotics and all these other things. That's now the way that they talk about NVIDIA. If you're just thinking about it as we make and sell chips, you're missing what the foundation here is. But also we make and sell chips is a lot. And I think actually Tesla is a great counter example. If you buy the Tesla story,

the NVIDIA story is much simpler, I think at the end of the day. I mean, this is the infrastructure for this. All roads in AI and machine learning lead to NVIDIA. Listen to this quote. This is from Raymond James analyst. There's an AI war and NVIDIA. Listen to this quote. This is from Raymond James, analyst. There's an AI war, and NVIDIA is the only arms dealer.

Yeah, and maybe in three years they'll invent a completely different architecture. This bet could lose. I'm not saying it's a sure bet. Put all your money on it. But in terms of what I see out there and also different scenarios of where the market is going for different reasons,

this seems like a story. I'm happy to... The kind of upside-down side is fine. This is Adam Parker story. I'm happy to, the kind of upside downside is fine as far as I'm concerned. This is Adam Parker from Trivariate, a friend of the show. Shout out to Adam. He put out a note on AI in general

and the stocks that are caught up in the AI mania back in April. And he says, NVIDIA is potentially not expensive. This is prior today. Potentially not expensive at all if AI grows for decades to come. Importantly, valuation is not an efficacious predictor of subsequent performance for hyper growth stocks. We have seen estimates that ChatGPT-5 is currently being trained on roughly 25,000 NVIDIA graphics processing units or GPUs.

That would be well over $200 million worth of hardware. AI is taking off now and has investable implications today. It is possible that valuation for things that are not AI-able could experience slow multiple expansion, and we revisit this. All right, so he's basically saying, like, there are implications here even for things that have nothing to do with AI on their surface because of how many areas AI is going to get itself into. Like they're sucking up all the multiple expansion? Is that what he's saying? Yeah. And the other thing, so the 25,000 NVIDIA GPUs, just so people understand, the A100 chip, which is last generation technology, it's a $10,000 chip. And you need like thousands of them to do anything at scale. The H100, which is the one that was so powerful, the United States government said to NVIDIA, you cannot sell this in China.

That's a $20,000 chip. The United States government said to NVIDIA, you cannot sell this in China. That's a $20,000 chip. Nobody else is making a competing chip that could even come close to the – I mean that's the story here that I think knocked everybody on their asses today. I also think it will blow up at some point. Oh, sure. We're all going to lose all of our money. But I think and hope there will be – I think in terms of the hype of this story and in terms of how many people even understand what's going on, I think there's no room to write. Well, they could be at $10 a share, an annualized $10 a share run rate in earnings over the next two or three quarters based on the guidance that they gave today, right?

Even if there's pull forward demand, blah, blah, blah. Like that's realistic. So $400 stock on $10 worth of earnings, it's definitely one of the most expensive stocks, obviously. But- Well, what else is growing revenue like that? It's also a stock that like after a day like today, when is this quarter end?

June 30th. How many people are like, fuck, I can't believe I don't have any NVIDIA in my portfolio? So in terms of broader investing implications, Eric Newcomer linked to Harry Stebbings, who is an investor, a VC guy. He said, Harry is often has an optimistic spin on things, but he's dour about the amount of hype in AI right now.

So Harry says, controversial take. There is simply not enough AI assets to absorb the immense wall of cash coming for AI companies. Not controversial. Prediction, this will be worse in the dot-com bubble in terms of lost dollars and hype companies. Be patient. State discipline and technology cycles always take longer than you think. So

I think that's a big part of the reason why NVIDIA is doing what it's doing today. Because there aren't 10 NVIDIAs. Yeah. I said it more succinctly than him. I wrote a couple of months ago on Twitter, people are going to lose more money on AI than they did on crypto.

But it doesn't mean there's no story here. But this is a prerequisite. So I've been saying AI bubbles since February. We're not even there yet. Yeah, we're not even there yet because we haven't even really had like the IPOs and all that shit. That's coming, obviously.

But you look at like, all right, Microsoft, Amazon, Alphabet ostensibly could be talked about as AI stocks. All right, fine. That's a lot of market cap. That could soak up some of these dollars. NVIDIA is a trillion dollar stock. That could soak up some of these dollars. NVIDIA is a trillion-dollar stock. That could soak up some of these dollars.

The question is, okay, then what? You're going to have this secondary class of stocks that are, let's say, market caps between a billion and $25 billion. They're all going to start talking about AI. Their CEOs are all going to – because of course. There are going to be more losers than winners in that category would be my bet. And I'm trying my best to not screw around with that stuff.

But that's what you're talking about. Oh, I'm getting sucked up. But even the big companies, there might be some major corrections along the way. I always think of Microsoft in 1999 know, in 1999 or 2000. It took it, I don't know, 16 years to go back to where it was. So it was painful.

You don't want to be caught up there. But I think I like to think that I'm surrounded by smart enough people that I'll know how to run away soon enough. Not in this room. We don't know shit. What do you do if you're so excited about AI because you're using chat GPT and you're messing around with all the new art programs that are out? What do you do if you're so bullish but then you're also not an idiot and you know you're not supposed to be putting a lot of money into a stock that just went up 200%?

What do you do? You just wait for something to happen? Wait. I can't do that. Yeah, you do? You just like wait for something to happen? Wait. I can't do that. Yeah, you wait. What are you waiting for though? No, but I think you allocate responsibly. Thank you.

Hold on. Now you're talking my book. So play small. So play small. Josh, what did I tell you on the train the other day? I'm buying. You told me a lot of things. I said I'm buying AMD just in case.

Oh, yeah, yeah. Mike said I added a little sniff of AMD just in case. Oh, yeah, yeah. Mike said I added a little sniff of AMD just in case. And also the best strategy, I'll tell you what I'm doing. I'm teaching an online course about AI. Well, that's the real way to do it. That doesn't go up or down. That's the real way to do it. There's excitement.

People want to learn. I teach them. I create value for them and for me and everyone's happy. What are you teaching specifically? How to use it or what the implications are going to be from it? So both. So it's called Hype Free AI, hypefreeai.com. And my courses generally- Spell that. Hype Free AI. Oh, Hype Free. Okay. Or just hypefree.com is also good. Okay.

And it's a mix. So it's generally for experienced professionals. My audience tends to be wealthier, older, kind of like, you know, I'm young for my audience. I'm 43. So people that want to play with it, want to understand how to use it. So a variety of tools. Also how to use it practically to automate things, for financial analysis, for productivity. And there's half of the time is kind of spent more on like understanding where it's coming from. How did it get here? What are the, and then like, what are the implications for different businesses? How to think about it?

So I want to ask you, what do you think is being most overestimated right now? And what do you think is being underestimated or not talked about at all when it comes to AI? So I think overestimated, it's a weird answer, but I think we overestimate our ability to control what's about to happen. Like all of these discussions about- I think there's tons of fear out there.

No, but we are overestimating our agency in this situation, that all these discussions about like, let's stop it, let's slow it. Oh, okay, the genie's out of the bottle. Yeah, okay, these are all nice ideas in theory, but this thing is happening. It's open sourced.

Here in America, it'll be hard to stop, and the Chinese are not going to stop if we decide to stop so i mean the the kind of the prisoner's dilemma here is very simple we can't like decide to slow it down do you remember all the paranoia when we decoded the human genome that all of a sudden there was going to be these experiments and the chinese were going to make super soldiers. I know, but are they really? Not super soldiers, but they're cloning people. No, but don't, like, it sounds like that to me. As somebody who's been around, I've been around, you know, for a while. I'm a little bit older than you, so you know what I'm talking about.

More handsome, too. I doubt it. So there was like this wave of like, wait a minute, we're playing God. We've gone too far. This is now going to get out of control. The government could say whatever they want, but people are going to start cloning themselves. Like none of that shit happened. Is it possible that all the fear that AI is going to get out of control might also be overblown?

Or I don't know enough to have an opinion. So I'm curious. Nobody knows enough. And that's part of the thing. Again, with overestimating our agency here, I think we just have no idea what we're dealing with here. I think even the stuff that you described about the past, I don't think we have any idea about that either

in terms of when you look at history, how things play out. In 20 years, we might understand that all the stuff that we've done with designing babies and viruses. So things are happening that we're not even aware of. We'll understand, and that's part of the nonlinear nature that I mentioned earlier. We're in a world where suddenly something can happen and you didn't see it coming. And then it blows up and it changes everything.

I think AI already, in that sense, is dangerous enough. And I'm sure all sorts of crazy stuff is going to happen in the next two years, let alone beyond that. Robots convincing other humans to do something on their behalf, letting them into places, manipulating them in all sorts of ways. Yeah, we'll see all sorts of crazy things. But I think we just have to roll with the punches to kind of think that we can control and kind of pull the handbrake and tell technology to stop moving. That's not going to happen.

Okay, so that's overestimated. So I'm practically optimistic. I'm embracing it because I don't think I have a choice. Sure. What do you think we're not talking about enough on this topic? Or what's not getting enough attention? I think we're underestimating how strong it already is. I think just rolling it out to everyone and teaching them how to use it

is going to have a dramatic impact on the economy. And then all the tools that will be built just on top of GPT-4 can already make miracles, basically. My dad was going through a bunch of tests a few months ago. I kept dropping blood tests and things into it. It just told me, analyzed stuff, told me what's going on. You had as much information as a doctor. Not just a doctor, but he spent three months running between different doctors. He was in some weird, unique, exotic kind of situation that, thank God, now is okay. But in 10 seconds, unique, exotic kind of situation that thank God now is okay. Good. But in 10 seconds, I got from it all the options

and what I should do. That took me three months to go through experts in the US and in Israel and wherever you want. And that's mind-blowing. There's an argument that the invention of the Gutenberg printing press like basically upended the feudal system in Europe. So there's like a before and an after.

And the after is all of a sudden, you could print books in any language, not just Latin. And so people had the ability to read something when before that, they just had to rely on whatever the priest said. And the priests were under the thumb of the kings and the lords. And then all of a sudden you just had like – Plus language got unified.

Yeah, so all those Protestantism movements, the Lutherans, et cetera, like all of that, that whole revolution stems from the Bible being printed in the lingua franca of whatever place. And that's like kind of how whoever was running the world lost control. The internet seems like it was kind of a moment where a lot of other things would be upended and they were. This seems like even bigger because now you're not just putting knowledge

in people's hands. The generative part is the part where, like from my perspective, like all of a sudden people are able to do things that they weren't formerly trained to do, like code. But a lot of other things. There's some aspect of that that I think makes people uneasy. And we haven't even really seen a big example,

but we're going to, right? Yeah, I mean, I think we should be uneasy. Even this internet thing, I don't think we have any idea what it's going to do to us. I mean, I think we should be uneasy. Even this internet thing, I don't think we have any idea what it's going to do to us. I mean, we started our discussion talking about cities and offices. We're just starting to get an inkling of what the world will look like just because of the internet. And AI is totally part of that story.

It couldn't exist without that data, without interactions becoming digitized. In many ways, remote work kind of set the scene for AI to come into the workforce because it sent everyone home, moved everyone to the cloud and to Slack. And now you're chatting with a robot anyway, like you don't know who you're chatting to. So now you're chatting with an actual robot and he answers you and soon enough, both of you are robots and you're just arguing. What about employment?

Because the argument that I hear from most people in the tech community, of course you're going to have job loss. Every technology revolution features job loss in the early innings. And then you have to create new jobs. don't focus on what jobs can AI do. What ends up happening is companies start focusing on, okay, what can the AI not do? And then that becomes your job. So a lot of people are in a job where the job itself is going to change, but not the employment. They're just going to have to do other things that AI can't.

That's, I think, a positive story. Yeah, I think, I mean, you know, when you look at it from the macro perspective, everything is great. Society and the economy always create enough jobs. Just in that process, there's world wars, there's communist revolutions, there's all sorts of other stuff that happens along the way.

So we might have to deal with some of that and it's going to happen much faster. I don't know if that's a good thing or a bad thing. It might be a good thing that it happened so quickly we just adjust and instead of it kind of spreading a stain. Would you let your child go to law school knowing that this shit is out there? My kids are so young. I assume they're definitely not going to go to a normal school.

They'll be prompting in no time. No, they'll do something else. I mean, the thought of me spending so much money on them going to the type of school that people learn in today doesn't make sense. Maybe it will make sense when they're 18 and I'll feel like I have to fall into line with everyone else, but at the moment it just looks insane to me. Let's put this thing up. You mentioned

people underestimating what it can actually do today. So you wrote into ChatGBT, generate an HTML snippet with an interactive chart showing NYC population by decade from 1900 to 2000. So it gave it back to you, you copy and paste it, and voila.

So this is the HTML snippet, so it's like something you could just embed somewhere? Yeah, I just put it on my website. Now I have an interactive chart. It went, it found the data, it rendered it. How is this interactive? No, you can tell. This is a screenshot, but you can touch it and each dot that you press, it kind of shows you the... It's is a screenshot, but you can touch it and kind of like, you know, each dot that you press,

it kind of shows you the... It's no big deal, but that's just... It's no big deal, right. So I did something similar on my blog. It just said, make me an... Using HTML, write me a rainbow stripe. And I embedded it on my site. Not that anyone needs that, right?

But just like the idea that that would be something that a regular person would have to give to a coder six months ago the marginal differences make a big difference like i'm i'm an individual creator i make money creating content giving talks and now exactly every idea that i have instead of figuring out who i need to talk to about it and waiting a week it's i just do it and that's nuts and i go on Zapier or other automation tools, and I can do much more advanced things with them because I can add those two lines of code here and two lines of codes there

and integrate that API and this API, and suddenly you have all these building blocks. So it's the aggregate of you and me and millions of people like us who were at the mercy of somebody that could technically do that stuff are now being liberated from that? And then what are the ramifications when anyone can create anything?

The ramifications are much higher inequality. So certain people are going to pull ahead, become 10 times, 100 times more productive. Certain people will stay behind. The middle will disappear. So just kind of doing your thing. So who wins, like the podcasters? I'm kidding.

It's just the economics of superstars that govern entertainment and sports are going to govern all professions. That's what's going to be the net effect of AI and remote work. So it's not no doctors, it's like less doctors and then like the middle of the road doctor is no longer necessary?

It means, you know, in the past, Taleb writes about it, scalable and non-scalable professions. In the past, your parents would tell you, choose a non-scalable profession, like a lawyer, a doctor, a teacher, a plumber, someone who's constrained by geography. And there's a normal distribution of income, which even doctors kind of have. It's skewed, but like, you know that if you'll be a doctor, you'll make a nice living. Like maybe you're not going to make a million dollars a year, but you're going to make something nice. More and more professions are now becoming scalable against their will. So whatever you want to go do, it's a profession that's going to have a few superstars making more of the money

and a long tail of people that make less and less money, but no middle. So just like by being there, 50% of success is showing up. As Woody Allen said, that's no longer true. And that used to be true, particularly at the office, you know, just go there, show up, you'll get paid, maybe you're not going to do great, but you're going to be okay if you're an accountant or a lawyer or whatever, or MRIs, all this stuff and for the last 20 years largely at the behest of the insurance companies, they send the results to India and then an Indian technician takes a look at it and sends back a result and that's pretty efficient

now, don't send it to India the machine itself is actually going to be more accurate and like so in other words this kind of thing

has already been happening but it's been like globalization now we're going to turn inward and be able to do more things here nobody

you know that might be bullish for America because we have other things to do in terms of services and things to sell to each other and spend our time on.

It's just not bullish if you're a radiologist necessarily or somebody that gets paid to read these results if the machine can read them better. But you can become a radiology influencer. That's right.

You could do a TikTok. Who said this? Wait, hold on. Before, I just want to return to NVIDIA for a second because I think this is an important point.

When thinking about valuations, obviously in the short term, throw them out. But if you look at some of the gigantic tech stocks, so Amazon trades at two times sales. Google and Meta are at five times. Tesla and Apple is at seven. Microsoft is at 11. And NVIDIA is at 35 times sales. So completely off the charts. And this guy on Twitter, Mac Ralph, tweeted, given the NVIDIA valuations, I think it's worth sharing this anecdote from the 2000s. At its peak, the Sun-Microsoft system stock hit a valuation of 10 times sales. When stocks took a massive beating later on, this is what its CEO, Scott McNeely, had to say to investors. So just bear with me for a sec.

I think this is important. All right. The CEO said, at 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that by my shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer company. That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard.

And that assumes you pay no tax on your dividends, which is kind of illegal. And that assumes with zero R&D for the next 10 years, I can maintain the current revenue run rate. Now, having done that, would any of you like to buy my stock at $64? Do you realize how ridiculous those basic assumptions are? You don't need any transparency. You don't need any footnotes. What were you thinking? And that stock ended up at $3. Yeah, I agree. The only thing- But you're not selling no because part of again we're chasing my most famous article maybe

you're good for the next five weeks I wrote an article called In Praise of Ponzi's Matt Levine first mocked it and a year later said actually it has a point everything is basically a Ponzi we live in a world of social dynamics

and the only way to know if something will succeed is after it actually succeeded. That's right. And that's all we know at the moment. Yeah.

So when something is heating up, if you can write it, write it, that's the best you can know. There's no way of knowing anything else. Matt writes about this

all the time because in the context of crypto, like this, like such and such token only actually has value if new people come along and think it has value

after you buy it. Yeah. How is that different than, for example, just like, like hear me out, but like a university, like is your degree worth

or money itself? Is your degree worth anything if the university fails to find another student next year and then the year after, and then closes down, like, and then you're walking around with this degree of a defunct university, is that worth anything? Like there's a lot of things that require new people to come along. So I kind of get what, is that what you're saying basically? I'm saying, but also in the real sense, not just in terms of reputation and marketing, more and more of our product depends on social dynamics. So you spoke before about like the

YouTube and that person that could do whatever they want from wherever they want. Like ChatGPT now enables me to, you know, do stuff that I needed a whole team to do a few years ago. So when you look at what happened with YouTube, when suddenly people were empowered to compete directly with the networks and with other content creators. Some guy can have 2 billion views by working in five minutes. What determined that success was the fact that he managed to convince enough people to click like, who then triggered the algorithm that intensified the success.

It's all social. In crypto, they added money to it where you can actually incentivize people to help the dynamic and then benefit from their contribution to the dynamic because the people who pressed like earlier actually contributed to creation of value. And increasingly, first, more and more of an economy is based on those type of products. We spend money on content. So if 50 years ago we had content to market actual stuff like soap operas, you know, to sell soap. Today, like air is what we sell to begin with. And even the stuff that is not air, even office buildings, everything is marketed through

social media, through things that are governed by crowd dynamics, by algorithms. So everything is a pyramid. Everything is a social kind of stampede. And that's all there is. Right. So if... Fun times ahead. Well, I was going to say, can that go on indefinitely? Or does at some point, something of value actually have to- No, it creates things of value.

Things are going to get weirder. Yeah. Okay. It reminds me of all the massive multiplayer online games. There's value there because enough people keep showing up. But they have to keep showing up in order for the game to live.

Everything is a network effect. Everything is a network effect. And everything is a network. What was the crypto game that was big in Southeast Asia? That? The Axiom. The Axiom. So it's a Ponzi, but it's a video game.

And it's only a Ponzi because the network dynamics went in reverse. If they didn't, if they kept finding new players who kept showing up, then theoretically it would be growing in value. Right, I wrote in that article, it's only a bubble once it bursts. Before it bursts, you just don't know

because it's working. It's recruiting more people like any social network. As long as it's growing, it's growing and then it makes sense and it's valuable. And once it isn't, it isn't. What are we saying here? The more new content there is, the more likely we are to consume old content. Who said that?

Is it you? I wrote that. Tell us about it. I called it the Vader paradox. It just looked like, and that's before generative AI and taking that into account. But it looked like the more content, the more abundance there is on the internet, the more we tend to recycle existing winners that people are already familiar with and can kind of rise above the noise.

So that's why we have all these sequels and spinoffs and prequels. Because they break through. Because it's a known quantity. They have an existing audience and they break through. But even that, now with generative AI, I'm not sure even if that dynamic will persist. Like when you think about Disney and kind of their monopoly on certain things that they built over the last few years. Once you can really generate personalized content for every person

and that content can just pop up on the internet all the time. Yeah, but you know what the first thing people thought to do with all this stuff? It's to take existing pop stars and have them sing over someone else's song.

Like that's, I heard Frank Sinatra sing Get Low by Lil Jon. So that's the inequality I was talking about. Right. So that's recycling that to your point. There's like so much content out there, but people are recombining old things that already exist. Plus all content now competes on a level playing field.

So Disney has an advantage, but also it might become completely irrelevant in two years somehow. Grimes actually did something really cool. She open sourced her investment. She said, anyone can use my voice to create a song. If it makes money, 50-50. But she's going to be the minority.

No, but I think that's the play here. To encourage experimentation and explosion of options and to take a cut. Anybody who wants to use the audio from this show to create new content, we're open for business.

AI will lead to a content boom, or will it go the other way? Derek Thompson was talking to Bill Simmons about what if in five years there's just an AI that would regurgitate what Bill says, like, you know, Celtics did this or whatever. Like, is that coming?

Yeah. I mean, Celtics will have five more championships. Is there really going to be an audience for that? No. I don't think so. I think there will be something for that. But again, it doesn't have to be Bill Simmons at that point. It just has to be whoever came up with it.

So I actually have this idea. I mean, look, I can't take a theory I have and expound on it and write a paper because I'm not academically... You're South Shore. I know. Yeah, I don't know shit. But here's what I think. I think there's going to be a boom in

authentication. And I actually think if you make 500 fake Drake songs and release them, even if the digital streaming platforms pick them up, which they won't, even if one or two of them catch fire and become a hit somehow because the right influencer plays it on their TikTok, all right, I understand that could happen and there'll be lawsuits and whatever. I also don't think that – I think that novelty will wear off pretty quickly. If I make 500 Metallica songs and 300 Drake songs

and I put all this shit out there, I think that is going to make people yearn even more for the real thing. Dror, can I quote you? Those who can afford it. So Dror agrees. Dror said, as technology advances, it's cheaper and easier to create new content.

And as a result, the digital experience becomes commoditized. If you want something unique, you'll have to go offline. Yeah. Most people don't want something unique, and they can't afford something unique. My friend Justin Frankel is starting a business where he's going to authenticate

music memorabilia. There's this whole black market of people selling fake shit. Like, you know, this is this celebrity's harmonica or whatever. So it's like a very offline thing. It'll all be sold online, but it's like basically, no, no, no. We witnessed the artist physically play this instrument and then set it down. And then we authenticated it on the spot.

Like, I think that that's really going to be the thing that has value. Anyone that can authenticate and guarantee that something is real. And I think that'll apply to music and a lot of other art. And to your point, there'll be people that are just like, entertain me. I don't care if it's fake. But I don't think that's going to be a great business. No, but part of, there's two points here. The quote you just read for me, I agree with it, but I think it gets more complicated.

You agree with your own quote? One of the unique things about AI is that it can generate unique content at scale. It's not like taking the same thing and now sending it to a billion people like the internet can do, but it's sending a billion people, very very cheaply something unique for them that is compelling to them. And that's a different story. But everything you just said actually reminds me of the C word, crypto, again. Oh my God.

Okay. Yeah. You know, that whole idea of kind of provenance of digital goods and how do you create complex royalty system and trustless. I don't know if crypto is and will be the solution for that. But I think people that spent the last five years in crypto know a lot about those dynamics and understand them much better than anyone else

and saw them coming. And AI is actually part of that story now and it's all coming together. Let's talk about millennials and I guess this concept of peak millennials. We're saying that the most millennials we'll ever have were born in 1990, 4.2 million that year. We have this chart?

Throw this up. I've had it with the millennials. I'm already, I'm all set. What do you mean? What does that mean? I don't know. This says peak millennials and the implications for cities, consumer goods, services, housing,

how it messed up our understanding of the internet pre-COVID and what happens next. So that's Dowell Myers. He's a demographer. But we spoke so much now about cities and remote work and all of that. And a lot of the conversation around cities was, yeah, why are people not coming back to the office? Why did millennials leave the city?

What kind of preferences they had? But this guy, already in 2015, he said, actually, cities now are really busy just because we have a lot of young people at this point in time, specifically, that are turning 25. There's a lot of them. Plus, we just had a housing bust a few years ago, so there's not enough housing for them to buy anywhere else, so they have to go into the city and work. Plus, there's not enough jobs for them anywhere else, so they're moving into the cities. And he said, by 2020, we'll see a big decline

in highly educated people moving out of cities and going to live in smaller cities and elsewhere just because there's not going to be enough of them coming in every year because they're just getting older.

But what about Gen Z? They come in, they're renting all these apartments that are being abandoned. But there aren't as many of them. There are more millennials than Gen Z. There's like 70 million, I think. Just look at the cohort by year.

You know why Josh is bitter? Look at the year that he was born. Nobody cared. There's like 70 million, I think. Just look at the cohort by year. You know why Josh is bitter? Look at the year that he was born. Nobody cared. I know, but we're the best. Born during the debt. Born during the debt. But we are the last generation of feral children. Actually, Gen Z, in three or four years,

there's a pickup of people that were born 17, 18 years ago. They're going to hit the workforce and graduate from college. That's my daughter's generation. But at the moment, we're exactly in that. Well, if you look at this chart, you see 2020 is kind of like the bottom of the demographic. So you have a million less people just graduating. So you have a million less people coming

to Manhattan or to LA or San Francisco. What's the biggest difference between millennials and Gen Z? I know it's blurry because that's pretty much it. I think Gen Z... No, wait a minute. Millennials remember life before the internet. Right.

Barely. I mean, I was born in 1980, so I'm a borderline millennial and I remember life before the internet. Yeah, of course. Most of them were born in 1990, so they don't really remember life before the internet. I think it's if you remember Oregon Trail. I doubt it, Dysentery, all the time. If you remember Oregon Trail, what? Then, Dysentery, all the time. If you remember Oregon Trail, what? Then you're a millennial that remembers life before.

Gen Z doesn't know from Oregon Trail. Yeah, I think if you think Spongebob is really funny, you're probably a millennial. You're not a Gen Xer, I think. There's some foundational stuff, but the Gen Z thing, that's who took all the apartments that were abandoned during COVID.

All these buildings were rented out immediately. Residential is not the same as office. In Manhattan. San Francisco, different story, for example. But I know millennials who are still in these buildings that were then colonized by 22 and 23-year-olds, and they're still traumatized. They can't believe that, like, they can't believe it

because all of the people older than them left. And then, so that dynamic of cities, I think, changes a little bit less when it comes to like who lives here, right? But then who lives and works here is the big difference maker. For New York specifically, there's no reason why the population of Manhattan won't be much higher in 10 years. They built Hudson Yards in a really specific way. The big insight there was big companies,

big employers like I think BlackRock and JP Morgan, like some of the tenants. The big insight was that Gen Z will not put up with this hour commute bullshit that their parents and grandparents went through. And they actually want to live next door to where they work. And there should be like a gym in between. So if you look at Hudson Yards, it's all these glass towers, brand new office buildings.

Then there's an Equinox. And then there's all the apartments. And it's not like I got to go downtown for work. It's like I roll out of bed and I'm at my office. The problem there, and I mentioned them actually in my 2019 book, is a good example. We should have more mixed use. But actually, Hudson Yards is not really mixed use. Because the people who live in those apartments are not the people who work in them.

They're not Gen Z employees, corporate employees. The apartments are just so much more expensive. But I think that's what they thought. That was the idea, right? That's the story. Okay. So it's nice that it's mixed. It's better than just having offices at this point.

Okay. But the way it's priced and the type of residential product that they have there is not the product that mid-level corporate employees could afford to buy. Right. A Gen Z person two years out of college, can't spend half a million dollars on an apartment. Or even a millennial

who has a decent job who's not going to buy a $5 million apartment in Manhattan. Right. Manhattan will always have that mismatch. Let's do some of this other stuff.

Disney had a Star Wars themed hotel. My understanding is they had actors dressed as Star Wars characters walking around all day long inside. How is this not a bigger hit? So they shut it down. What does this tell us about the value of physical versus digital assets?

Yeah, so to go back to Michael's story, to Michael's quote, that was the play that Disney was making. It was like, oh, we have all this content. We have this captive audience. Now we can bring these people to have a unique experience offline. But actually, a few things happened. One, the offline world got really, really expensive, both to build stuff, to operate it, to fill it with people. It's just really, really expensive.

Second, one of the big problems, so they had to price it really high, and not enough people could come. How much was it to stay at the Star Wars? It was a lot. $5,000 for three nights or some crazy thing. So how many people could really do that yeah

and they assumed it's your special birthday once in your lifetime or something the whole family they only built 100 rooms so they sort of knew maybe

at least they started small it's not like there's a gigantic I mean I saw the write off was like 200 million dollars something like that

it's like a lot though which is a lot, though. It's a lot of money for something that you launched two years ago. It's not nothing. Yeah. And the other thing is they only had kind of one story that you can kind of live through, which also emphasizes the problems with doing stuff offline. Yeah, you have one story. If you get it right, it's a unique experience that people will love.

But the chance that you'll get it right is much lower and the cost of failure is much higher. So when you're competing with other experiences online that now can become unique at scale because of AI, I think that thesis of offline will be okay because it offers unique experiences is kind of less compelling because people are going to be entertained so well elsewhere that the real world will have to try really hard and find new things to do. I think if I woke up in the Star Wars hotel, I'd kill myself. I think I'd go back to, like, I'd come down to the lobby. People would be like interacting with me, maybe like chasing me with a Star Wars gun. I think I'd go back up to the

room and just end it right then and there. So, all right. But I'm a bigger offline person than online person these days. But I definitely see your point. Tell us how remote work and AI reinforce each other. So just like bring this whole conversation full circle. So, you know, three years ago, we were all forced to stay home, to start collaborating on the cloud, to start chatting with each other, to start to work asynchronously, to have digital meetings. And basically that set the scene, prepared the ground for AI because now all these chatbots are coming.

They don't need to wait until they have an actual robot and they can walk into an office and interact in the physical environment. They just plug in and they chat with us on Slack just like we chat with each other and they read our documents on Google Drive just like we would. They're basically plug and play, ready to work and replace us and do whatever they want.

At the same time, they also enhance digital collaboration tools for humans. They make it easier for us to collaborate remotely. They make those tools better. Very soon down the pipe, there's all sorts of, you know, kind of holograms and cool stuff that, you know, both Facebook and Google are building. The two years ago when they presented it, you had to like build like a crazy booth with all sorts of cameras. But now thanks to AI, you can have a TV like this with three regular cameras and it creates like a really cool kind of basically animation. You think this stuff is coming soon where you can have a meeting with

10 people, they're all remote and they they all are walking into a room together. Oh, like in Star Wars. You know in Star Wars there are holograms? Yes. Yeah, so it enhances presence, which means more remote work, more work becomes digital or kind of mediated by technology,

more room for AI to go into the workforce. So companies are not really going to be spending less money as a result of people working remotely. They're just going to spend money differently. Yeah, for sure. Because the tech is going to be spending less money as a result of people working remotely. They're just going to spend money differently. Yeah, for sure. Because the tech is going to be very expensive. And the offices themselves, the good ones, are going to be more expensive. And there's room for landlords to make money as well.

But most of them will not. That's the difference. Again, the power law versus the normal distribution. Just building a decent building in Manhattan is not going to guarantee any success. So I want to get into this because I think there's a little bit of a read through here. I was looking at earnings for Q1 and we talk about all of the benefits that we think are coming as a result of AI in profitability. We're not starting from a terrible place.

One of the biggest takeaways from Q1 earnings season, which is wrapping up now, it's pretty much done, is that corporations, we've talked about this, corporations are just amazing at finding ways to maintain margins and build on profitability. So this comes from Savita Subramanian at Bank of America, they, this morning, they raised 2023 earnings estimates to $215 from 200 following the strong Q. So this is, this is Savita, uh, once again, showed corporate America's ability to preserve margins while a potential recession in the second half, which is their house view could put some pressure on the consensus. Second half earnings recovery. We believe the downside risk will be mitigated given companies' cost cuts.

And then FX becomes a tailwind in the second half. So they're actually now raising earnings estimates. We spent the first four or five months of this year talking about earnings have to come down, earnings have to come down. And now it's more like, hey, maybe not necessarily. Bank of America, for what it's worth, is also saying 2024 estimates are now at $235 a share, which would be year over year growth of about 9%. So we still haven't had the recession yet, but we're already in an earnings recovery. Well, getting back to the NVIDIA thing, their revenue went from whatever it was a quarter ago. I mean, just incredible growth.

$6 billion. I thought we were in a tech recession. Where is all this spending coming from? I mean, there's still tons of money on the sidelines. What do you mean? There's dry powder, I think, in venture. There's a lot of money that pulled out of the market and out of crypto and out of other places that is still looking for places to be. I think in terms of absorbing all

of that liquidity that started 15 years ago, we haven't done that completely yet. Well, first of all, if Microsoft and Amazon and Google are going to go to war with each other and they have to buy chips from NVIDIA to wage that war, they all have plenty of money.

And NVIDIA booking $11 billion in revenue next quarter,, they all have plenty of money. And Nvidia booking $11 billion in revenue next quarter, it sounds like a lot of money, but not if that money is coming from Microsoft. And so that's, you know, people forget you're not buying the economy when you buy the stock market. You're also not even buying enterprise spending. You're buying corporate America's profits. Yeah. And I think there's, I haven't analyzed this. I'm just speculating here. That's all we do. But I think America in general, there's money flowing in because people in the world don't have anything better to put their money on. Okay.

There's this other story about CapEx and reshoring. I don't know if – have you looked at this yet? No. Okay. Have you looked at this yet? No. Okay. But basically, and this is also from B of A,

CapEx cycle, fiscal stimulus, productivity gain, following 10 plus years of underinvestment in the US, CapEx is mandatory. They think 14% year over year in first quarter. $600 billion worth of mega projects that are a billion plus in size each have been announced since January, 2021, which is triple the typical run rate um so this this is like this reshoring story where intel is going to make chips in ohio rather than in taiwan etc there's something there's something real there yeah it's happening i mean it supports industrial real estate it supports job

creation yeah and at least for the federal level it looks like the president kind of toned down the China decoupling story. Yeah, it's not a win for him. Yeah, but still, these things are happening. I think a lot of companies, corporations themselves, they realize that they've maybe stretched their supply chains a little too far and wide, and they want to have more control and more certainty. Let's do these charts, John. So this is coming out of the earnings. So this is Q1 earnings was a 5% beat, which is double the typical beat.

So you would say like, okay, this is the earnings recession. Like, not so terrible. Next chart. Every sector beat earnings except utilities. So these are the revisions since the start of April. Materials, consumer discretionary, industrials, like all of this is mid single digits to high double digits. Next one. This is when they stopped cutting earnings estimates.

So consensus earnings per share stopped falling after a 13% decline since the peak in June of 2022. So I don't know if it's over, but pretty mild as drops in earnings go, I think. Last one, this is guidance ratio. So this is like what S&P 500 companies are telling the street. And this one is now 1.2 times the highest level. Highest level since 2021.

So I thought, I thought if you tell me like the bear case for 2023 is earnings, which I think most people said that was so far not so, right? What's the takeaway from that? It did not come to fruition. It didn't play out that way? No. So people were expecting a combination of multiples, multiple compression with earnings dropping.

That with the mega bear case. And neither of those things really happened. We got that multiple compression last year. And earnings are okay. They're down, what, like 5%, 6%? Not so bad. To me, this encapsulates the whole story of the last maybe 20 years of terrible, crazy monetary experiment going on, trying to mess everything up. And American business, especially tech, just coming up with increasingly incredible things. They just find a way.

They just find a way. They just find a way. Well, we're trying to slow the economy, and the Fed is not succeeding. The four biggest economies, if you look at global PMI, is accelerating. So I don't know what are the tools they have to slow down the economy, but it's not happening yet. What's this Binance story? Oh, boy. Oh, Binance. What now?

All right. So here's what Binance is currently dealing with. They are facing civil charges from the CFTC of willful evasion of U.S. commodity laws. Is that bad? They are under investigation by the Justice Department for suspected money laundering and sanction violations. And Reuters had a big investigation. Let me just read the lead. The world's largest cryptocurrency exchange, Binance, commingled customer funds with company revenue in 2020 and 2021 in breach of u.s financial rules

that require customary money to be kept separate now these are just allegations warriors found no evidence that binance client monies were lost or taken um but yeah this is not good well and you're you're not even supposed to be on the binance platform if you're in the United States. So just the fact that they're taking customer money, I think it's mostly institutions that use Binance in America. It's not a retail business. But a lot of the allegations were for the hedge funds.

They made it very easy how to circumvent our laws. A person with direct knowledge of Binance's group finances said the sums ran into billions of dollars and commingling happened almost daily in the accounts at the exchange held at U.S. lender Silvergate Bank. Shocking news. Who would have thought?

The FTX kid is trying a new defense, which is that actually everything that we were doing was fine until somebody decided to say it wasn't. Like, he's not saying, like, I'm sorry. This is really interesting he's going to get away with it that's what I thought from the beginning

the detective work by Sullivan and Cromwell what is that a bakery? sounds like it which has submitted bills totaling 55 million dollars to the bankruptcy court is already proving beneficial to prosecutors in a January court filing Sullivan and Cromwell displayed an excerpt

from FTX's underlying code base showing a feature that allowed Alameda, which was their hedge fund, to borrow virtually unlimited amounts of money from the exchange. How are they going to get away with that? Like a legal maneuver? I can't imagine.

I think, I mean, because it was so known. First, the fact that this guy is not even in jail yet is amazing to me. Yeah. What is he doing? He's got an ankle bracelet and he's hanging out in his dad's house? Yeah, and he's just hanging out. Yeah, something like that. Port Washington?

No, he's not in Port Washington. But he's off the internet. Palo Alto, no? They kept him off the internet. I don't even know. It's been pretty quiet. Yeah. But, I mean, it's just a complicated. Too much money has been lost. Yeah. But, I mean,

it's just a complicated, yeah, exactly. But it's a complicated story and they're just going to muddle it and muddle it and muddle it. And then it's really hard to find a smoking gun here

because, yeah, I had this fund and that fund and nobody told me that I'm not allowed to do that and the customers agreed and whatever, you know.

Gerard, the internet got excited yesterday. People on CryptoWeb3, Fred Wilson, one of the best venture investors, said, he was speaking about something and he said, I was reminded of that moment yesterday when in our quarterly call

with our limited partners at USV, we were asked if the regulatory pressure in Web3 in the US would result in us cutting back our Web3 investing, to which I responded, when they want to shut it down, I say double down. You have any thoughts here? Yeah, at first I love it. It's nice to kind of rally the troops a little.

Yeah, bullshit though. But to go back to the point. Fred Wilson's not going to jail for Web3. Oh, for sure. Let's all relax. Wait, hold on. What are you talking about? Regulatory pressure right now on anything that has to do with Web3

is such that everybody is calming down on their investing. And there's no evidence that people are full speed ahead investing in any of this stuff. It's really scary. It's really scary when the regulators can decide. Do you think that he's lying? No, but I don't think he's doubling down either. And I don't think the appetite out there exists in an environment where regulators can come and say- He's telling you this is appetizers I was reminded of a moment when I said that

you didn't say double down we live in a time where they can say this thing that you did three years ago we decided it's a security that's what's going on right now it may not be going on forever but is anybody like really investing at the same pace they were two years ago

no of course not but some are still investing quite significantly just because they raised a lot of money. They're investing in startups that are doing crypto things. In Web3 stuff, yeah, they are. Okay, they're not buying the coins because we have the flows data. No, right, but they would have told you that they're not really buying coins to begin with.

They always said that. But they did. But to me, this actually connects more to the macro story, not as a Web3 story. But I think this is the attitude that we need. I mean, the government is important. They should keep doing what they're doing. It'll be nice if they do it a little better.

But we need entrepreneurs and investors to make those crazy bets because that's the only thing that's going to enable the government to continue existing. You think we really need the amount of mental capital that went into blockchain stuff over the last five years? Do you think that is helpful if it continues? And to what end? So let me give you an example from something that is currently hot. There was just a leak

from some Satya Nadella meeting with their head of R&D. And he told him, how come OpenAI with 250 people, they can come up with this stuff and you can't come up with it here internally at Microsoft. But that's the story of our economy.

How many people were trying to do what OpenAI is doing for the last 20 years and how much money did it cost? So the 250 people that figured it out, that's a success story, but it wouldn't have happened without all of these crazy experiments. So crypto is an intensification of everything else. There's a lot of potential OpenAIs that didn't work out in order to produce the one that did.

Yeah, and with crypto, we know now some of what we know, but even that story I don't think is over yet in terms of the things that are being developed there. Of course, there's a lot of bullshit, and as I said, there's a lot of bullshit in AI as well, and people are going to lose more money there than they did in crypto.

And yet, they're trying to build tools, at least those of them who are really honest and excited about it, that I think are very, very important for our future. Again, in terms of our identity. Why are they important for our future? Because it's about how can you have an identity online? How can you verify the authenticity of things? How can you build business models that allow more people to benefit from these superstar effects and from these crazy kind of rallies?

So people could basically make money just by doing what they're doing online. And the blockchain is essential for that, or it's one possible solution? It's one possible solution. It's where all the experiments are going through. I think a lot of those experiments are very significant, and they're only going to become more important over time. And that's what I thought then. That's what I think now.

Was there a lot of silliness going on? For sure. And also, a lot of us knew it in real time as well. It's not like think now. Was there a lot of silliness going on? For sure. And also a lot of us knew it in real time as well. It's not like everyone was kind of starry-eyed. There was a lot of really stupid stuff going on. Do you think the decks have been cleared of most of the scammers and the pretenders? There's still plenty. Some, yeah. Because I could picture a scenario where all of a sudden there's like a real world blockchain use case and there's not 500 people hyping nonsense on Twitter. I don't think the idea of real digital money is that outlandish.

If you just strip it down to something just as basic as that. And anything that happened over the last few years just reinforced the need for that in terms of monetary policy, in terms of what happened in Russia, in terms of what happened in Canada. We need that control. And like you said, you were talking before about Kings and the feudal system. We have no idea what's coming. And this is the infrastructure for the future, or at least an experiment.

Let's do social networks. Overall, like the Twitter spaces thing that went on this week, I don't think it was that big a deal. I think the media loves it. The media doesn't like when somebody comes along and is able to disintermediate and, for example, have a president, have a presidential candidate announce on Twitter.

That's got to be infuriating for, like, CNN. And, all right, so... I was really proud of myself that I didn't see any of that on Twitter. It means that my filters and muted words and blocked accounts are just working really well. So the news was taking a huge amount of delight in the fact that there was a technical glitch on Twitter that led to like 20 minutes of hang on, hang on, we're almost ready, we're almost ready. Big f***ing deal.

hang on, hang on, we're almost ready, we're almost ready. Big f***ing deal. Like, so, all right, maybe the next presidential candidate will not choose the Twitter spaces as the forum to, but like, there's just so much shade in Freud from the traditional gatekeepers for, and I'm not an Elon stan. Me neither. I don't know.

I just feel like social networking and social media is dying. And now there's like 20 new ones coming along. None of them seem to catch the public's imagination for more than a day or two. I mean, people spend more time in private chats, you know, on WhatsApp, on Discord. Yeah. Spend more time and now spend more money.

And also a lot of AI stuff is happening there or directly integrated into Discord, which is kind of fun. We might have new concepts there as well, just like TikTok Emerge, but it's not exactly a social network anymore. It's more like a content kind of thing. Well, it's not text-based. Yeah.

And you're not really connecting with people. You're just watching whatever comes in front of your screen. Okay. If Instagram does their own version of Twitter, which looks like it's happening, that, I think, has the potential to put an end to Twitter. I don't think so.

It has the potential to cause pain to Twitter. But Twitter, I think, for the tech and finance kind of intelligentsia, they remain what it is. They're all on Instagram, too. Not all of them. I'm not. But Twitter's still the news center, news capital of the world. But a lot of the other crap, like sports and entertainment move to instagram which is fine with me but it may be bad

for business for elon okay um we're gonna go into favorites but i wanted to ask you did you have fun on the show today i did all right i thought you were i thought you were uh the perfect guest for this week and you did not disappoint um so how so how many shares NVIDIA are you going to sell tomorrow when the market opens? Zero. Okay. I might have to sell a little. Part of me thinks that this has to end at 500. Maybe. I'm just picking that up though. There are price targets above 500 right now. Because of the allocation, the size of my overall position there is still small.

Okay. It's become like 4% of my portfolio, of my stock portfolio now. Yeah. Also, is it a bigger risk psychologically if you do sell? Yeah. And then it's like a $5 trillion market cap. It becomes the biggest company in the world

and you're like, I knew it had the potential. The thing is I started with such a small position and that's my main regret. Why didn't I buy like I would buy everything else? That buy everything. No, but most tech stocks that I buy, I usually buy bigger positions to begin with, but this one was kind of like, Oh, let's just buy a little. And then it started going up. So I bought a little more, but I said, let's wait for something for an entry point. Right. So now I really like, I'm not going to sell. I'm just, if I lose all of it, that's fine. But, uh, okay. Well, I'm not selling either. I'm just kidding. I'm just, if I lose all of it, that's fine. Okay. Well, I'm not selling either. I'm just kidding.

I'm not even contemplating. Not investment advice. You know what? Because I said to myself, could I live with it if it went back to 300? Yes. Yeah. I could totally live with it. I don't think it will.

But if it did, I don't think I'd be like suicidal over it. So I'm going to let it ride as well. We do favorites at the end of the show. Wait, did you just say back to 300? You mean like where it was yesterday afternoon? Yeah. I'm saying no. If this whole run got erased at the end of the show. Wait, did you just say back to 300? You mean like where it was yesterday afternoon? Yeah. I'm saying, no,

if this whole run got erased in the next week, I'd be like, shit, I should have sold some, but not seriously. Right. Right? Okay.

Favorites. Any books, any shows, any movies? What would you recommend that the audience check out that maybe they don't know about? Ooh, so a good book that I returned to recently

is called Linked. It's about network science. It's kind of like a Hungarian-American professor. And it's kind of about the early internet, but I think there's a lot of insights there that are very, very relevant to everything we do. How many books do you read a month? I don't know.

I read a bunch in parallel. Okay. So probably in a year, I go through, I don't know, 150 books, but I don't read all of them. What are you mostly reading about? history, tech some literature I don't use books

I don't read books of the same kind at the same time so I usually read one of each I do the same thing I read like a fiction book and then like usually a biography and because I'm reading to it once I never finish either so it's a really great system I have. No, me too.

And I'm fine. I'm very kind to myself on that front. Like, you know, if a book doesn't grab me, I don't feel guilty about leaving it or coming back to it. Who is it that was saying like, I'll put a book down after one sitting if I don't like it? Morgan was saying that, right? Patrick?

Maybe Patrick. Oh, yeah. Shaughnessy? Yeah. Yeah, I mean, it makes sense. I was unable to do that until five years ago. Now it's, I don't even think twice about it. It's been a re-appearance.

It's important, though. And now that I'm writing a book, I also, like, every day I go through a few books that I kind of, like, really go through really quickly or digitally just to find what I need. So also I go through a lot of them. When does this book come out? So I'm serializing it. So premium subscribers of my newsletter actually get a few pages every week already. It'll be done, I don't know, in a few months. It's kind of like a third of the way there.

Okay. So maybe in four or five months. It's interesting to release the early part of a book before you finish the whole thing. Because it changes. And with this AI stuff, for example, it's a book about the future of work, essentially. And a lot of stuff changed. So now I can kind of change it. Second, as a business model, it makes more sense because instead of selling a book through a publisher and getting $3 per copy in two years, I'm monetizing it right now with a monthly subscription that gives other things as well.

You know who sold his books like that? Charles Dickens. Right. You know what I mean? Yeah, a lot of authors were serializing their work on newspapers. He sold it to a newspaper and people would buy the newspaper for the latest chapter. And I don't know how long he dragged it out over. I think like A Christmas Carol was sold that way.

No, but even David Copperfield. David Copperfield. Okay. So we're coming back to that. And we are. So yeah, so I read a lot of, I go through a lot of books. Very cool.

Very cool. Mike, you got a favorite for us? I don't because my schedule has been pretty- Oh, you have Sam Zell on here. Well, okay. I've just been watching Succession, Dave, and the NBA.

So there's not much room for other shit. But I did listen. I did listen to Sam with Meb, Sam Zell with Meb. There was so many good nuggets in there. And yeah, probably was the last public-facing thing that he did.

It was like an hour, and it was five weeks ago. So Sam Zell and Meb's podcast was brilliant. And his book, I think it's called Am I Being Too Subtle? Sam Zell's book. I never read that one. You read that?

Yeah. It's like real estate deals and stuff. It's also a personal story and it's really fun. You must have read that. All right. I have two. One is music, Seven Psalms, which is Paul Simon, who is now 81 years old. Wow.

And he did this really interesting thing. He claims that these songs were coming to him in his sleep and waking him up at 3 o'clock in the morning and he would jump out of bed and just write the words down that were coming to him in his dreams and he like retired from touring I know I've been to his last show like three times already

I saw one of the last ones at Forest Hills me too but then I saw another one in Madison Square Garden that's like where he's from. He was super like not cool to the crowd. He was like not very gracious. I think he's like just – he's done with that part of it. I think he's done with that.

There was nothing sentimental that he projected about it. Like, thank you for everything. I'm home. Yeah, I was on that show. I saw him in Israel. I saw him in – I've seen him a bunch of times with Garfunkel, like at Madison Square Garden. I've seen some shows where they were really excited to be back together.

So he's, I mean, 81, it's like, you're obviously not going to go on a tour unless you really want to punish your body and your mind. So he puts this thing out. It's 33 minutes. It's one track, but it's seven songs comprising the one track and you could hear the difference when one song ends but it's not like an album with seven tracks and it's interesting because the whole streaming concept is the other way like when your favorite new artist puts out an album now on spotify it has 50 songs on it because they're gaming the algorithm. The more songs,

the more chances there are for likes, which increases your... So he went the other way. He did seven songs as one. That's the fun things we're talking about. Yeah. The writer from the New York Times... So the theme of the material is like, I'm probably dying soon.

And after all this time, do I believe that there is an afterlife or not? It's like, do I believe in God or do I not? And he doesn't really resolve it, but it's like not something that you listen to while you mow the lawn. Like, I think if you're into, if you're into this kind of thing, you sit down and you like, listen to it. Mushrooms. Yeah. Mushrooms for sure. But the writer from the New York times pointed out, David Bowie did this. He put out an album called Blackstar. Leonard Cohen did this. The album was called You Want It Darker.

And they're both Paul Simon's era. They both died within days of those albums being released. Almost as though they knew it was coming and they had to get this last thing out. So let's hope that's not the case, obviously, with Paul Simon.

But I listened to it a couple of times. There's a lot of shit going on there. We'll just put it that way. The other thing is Daniel Ek on the Acquired podcast. You listen to Acquired? Sometimes, yeah. That was a good episode. I think it's like the highest quality business podcast. He's great, yeah. Fantastic, right? So Daniel Ek did an hour and a half with those guys. They flew to Stockholm to do it at Spotify. And they spent about an hour of the – Duncan, did you listen to it yet? I haven't had a chance yet.

I assigned it to you. I don't know. It's on my way. They did about an hour just on podcasting and where that business is going. And it's just really fascinating. Talking about network effects and all these things. So highly recommend listening to the CEO of Spotify,

Daniel Ek, on the Acquired podcast, which I listen to on Apple podcasts, of course. Wait, so one of the cool things about Spotify is like you could listen and or watch the video. Yes. So I like the option because if you're walking, obviously you're not going to hold your phone up. Yeah. But if you're like, if you stop midway

and you want to pick it back up when you're on the train, you can watch it. Yeah. And I think they are unappreciated for how much more they're doing for podcasts as an art form than any other platform. Oh, for sure. Yeah.

They're going deep on it because it's much more profitable for them than paying royalties to the… They really are. Paying royalties to the… By the way, if you They're going deep on it because it's much more profitable for them than paying royalties to the— They really are. No, paying royalties to the— By the way, if you're listening to this on Spotify— Labels. Like and subscribe. All right.

On Spotify, I actually have two reviews to read. We have a question and answer feature on Spotify now. So if you're listening on there, you can answer a question, what did you think about this episode? That's the default. So if you're listening on there, you can answer a question. What did you think about this episode? That's the default. And so MCJH Robinson said, another great discussion to perambulate to.

I like it. That means walking. I Googled it. Yes. And then EMC said, most informative podcast I've listened to all week. Keep up the great content. Very cool. Shout out to all of our Spotify listeners. We appreciate you.

Hey, guys. Thanks so much for listening this week. Thanks to our very special guest, Dror Poleg. Let's tell people where they could follow you. So you're on Twitter. What's your handle? At D-R-O-R-P-O-L-E-G. Okay. Or my website, drorpoleg.com or hypefree.com, which is my course.

Yeah. If you want to check out Dror's course, it's hypefree.com. And that's basically you walking people through what they need to know about AI. Seems like something that everyone should check out. I agree. Oh, you're the man.

Thank you so much for coming by. We appreciate it. Having you. Thanks to all our listeners, Duncan, John, Sean, Nicole,

Rob, great job behind the scenes this week. We'll see you all next week. Compounded friends out. So that was like the dress rehearsal. this week. We'll see you all next week. Compounded Friends out. Boom. So that was like the dress rehearsal. We're going to go get some water and just kind of regroup.

You feel you ready? Sure, thank you. Appreciate it.