The Prof G Pod with Scott Galloway - 2024 Predictions

Episode Date: January 4, 2024

Scott goes through what he got right vs. wrong in 2023 and then shares his predictions for 2024. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Support for this show comes from Constant Contact. If you struggle just to get your customers to notice you, Constant Contact has what you need to grab their attention. Constant Contact's award-winning marketing platform offers all the automation, integration, and reporting tools that get your marketing running seamlessly, all backed by their expert live customer support. It's time to get going and growing with Constant Contact today.

Ready, set, grow. Go to ConstantContact.ca and start your free trial today. Go to ConstantContact.ca for your free trial. ConstantContact.ca Support for PropG comes from NerdWallet. Starting your slash learn more to over 400 credit cards. Head over to nerdwallet.com forward slash learn more to find smarter credit cards, savings accounts, mortgage rates, and more. NerdWallet. Finance smarter. NerdWallet Compare Incorporated.

NMLS 1617539. Welcome to the 281st episode of the Prop G Pod. We'll be back with our regularly scheduled programming next week, but to kick off the year, we're sharing our 2024 predictions. I do a prediction stack every single year, and it's a ton of fun thinking through what we got right or wrong from the year prior and what we can expect in the year to come, or what I think we can expect. What you're about to hear comes from the live stream we did with our higher ed startup section back in December. We cover everything from predictions on the housing market to geopolitical pensions. We have approximately 3,600 seconds and 193 slides. So let's light this candle. So the first thing we're going to do is we're going to take ourselves,

or we're going to go through the predictions in 2023 and try and hold ourselves accountable. We'll then bust into our 2024 predictions and we'll try and summarize. So holding ourselves accountable, keep in mind when we made these predictions, it was over 13 months ago. And the difficult thing about being in the business of predictions is that it's a shitty business because if you predict that MetaStock is gonna triple,

all the events leading up to its tripling make its tripling seem somewhat mundane and obvious as opposed to if you get it wrong, that seems obvious to get it wrong. So it's just the stuff you get right doesn't seem that provocative or that interesting in retrospect, and the stuff you get wrong just seems wrong. Anyways, first prediction we made last year was that Disney acquires Roblox. Obviously, that did not happen. I do believe Disney is going to be part of a merger. They will either acquire or be acquired this year, as even Disney isn't big enough to survive and thrive in what is a quickly

consolidating streaming market. So we got that wrong. ByteDance breaches $1 trillion in value. We got that wrong. I was offered shares in ByteDance literally this morning for a valuation of $212 billion. I think it's mostly geopolitical risk that's holding this firm back, and I continue to believe it's the most ascendant tech platform in history, perhaps with the exception of OpenAI. I would argue that at that price, I need to sort through my own ethics about whether I should invest in what is the ultimate propaganda tool for the CCP. But in terms of valuation, it is dramatically undervalued right now. It has a run rate of $116 billion versus $136 at Meta. Meta is growing 23%. ByteDance is growing at 40%. So you have similar revenue companies, but one is growing much faster,

and yet one is trading at approximately one quarter the value of the other. So it's just hard not to, by any reasonable metric, argue that one, either ByteDance is dramatically undervalued or Meta is dramatically overvalued. Tesla posts record revenues and profits and the stock gets cut in half. Okay, so this looked like it was going to be our first correct prediction, and that is about the moment we made this prediction. Within about three months, Tesla stock was in fact cut in half. However, it has since rebounded aggressively, and it's kind of back to where it was, but I think we have to say we got that wrong. It does appear that the EV market is attracting a lot more competition, and while the revenues

have grown dramatically, their margins are coming under substantial pressure, and they're having to cut costs as evidenced by the fact that their net income has not kept pace with revenue. Typically, when you see this sort of revenue acceleration, you see a dramatic sort of slingshot effect with net income. We're not seeing the benefits of scale here, but still, nonetheless, we did get that wrong. The margins, the net income margins have in fact grown, but not at the same scale. Best performing stocks we predicted can't help but be in the shitty business of predicting stock prices. But we predicted last year that the three stocks we would go long on would be Airbnb, Meta, and Chinese internet stocks. So let's look at each of those three. We gave ourselves sort of a thumbs sideways, if you will. NASDAQ had its best first half in 40 years,

and it's had one of its best, I think one of its best three years in the last 20 years. Airbnb was up 66% versus 39% for the NASDAQ. So we got that right. And then if you look at Meta, Meta was up a whopping 167%. That felt like the easiest call. Meta had been dramatically overpunished because of the consensual hallucination Mark Zuckerberg continued to

have with his investors that people wanted to hang out in an incel panic room called the Metaverse, where more people were showing up to MySpace every day than to Horizons World. But they overpunished it. It's still a cash volcano, still two-thirds of all social media and growing its business quickly. And then the year of efficiencies cut in costs while maintaining the great taste of revenue growth resulted in an explosion in earnings and an explosion in the stock price. And then where we got it wrong, so we were two for three, where we got it wrong was around Chinese internet stocks. And as you can see, Chinese public companies continue to fall under pressure. Streaming consolidates. We got that right. This is just a perfect example of economics class. You could teach the basics of economics just on what's happened with streaming.

No competition for a long time, then way too much competition over investment that's totally unsustainable. But the market is still growing. This is clearly where the market is headed. But there was just way too much capital that poured into this. That spells two things. It spells cost cutting and consolidation. And we're seeing both of those things. Paramount and Apple are likely pairing up or at least bulking up, if you will. We're also going to see Disney consolidate with Hulu. And it looks like even Netflix and HBO are talking about having a similar or a bundled offering to telco, specifically Verizon. So we're seeing massive consolidation and cost cutting because all of these companies recognize that this is a great business. It's just economically

unsustainable based on the investments they were making and based on subscale. And so we're starting to see a rationalization in this business. We predicted that 2023 would be a Patagonia Vest recession. The calls for a recession were greatly exaggerated. But the one part of the economy that would incur a recession was the growth economy. And we got this one right. Keep in mind, last year in November, when we said there wouldn't be a broader recession, 100% of economists who were surveyed were calling for a recession, and it just didn't happen. However, we did see layoffs in the growth part of the economy. It has to be said in context, though. This is the actual layoffs. Seems like a lot of people, if you're one of those people, it seems like this was devastating. However, this has to be set against the amount of hiring during the pandemic. I think this sort of embodied peak growth economy, if you will. Amazon, Alphabet, and Meta have the most profitable year. We got this right. When you combine the great taste of cost-cutting without the calories of reduced revenue growth, you have an explosion in operating income.

So Meta embodies this. They actually reduce their expenses by 7% while managing to grow their revenues 23%. I don't think I've ever seen that before. The result was an explosion in net income. See above, their stock has tripled. Amazon's not quite the same scale, but still pretty impressive. A 6% increase in operating impressive, a 6% increase in operating costs with a 13% increase in revenue and a dramatic increase in operating profits.

Our other big prediction in November of last year is that we had hit peak personal genius, that our idolatry of innovators had probably peaked. What was interesting today is the Epic Games victory over Google. Keep in mind, Apple won or Epic lost in a similar trial against Apple. The big difference, though, and it kind of embodies my point here, is that one was decided by a judge, the other was decided by a jury. And the case decided by a jury found in favor of the plaintiff against Google. I think people are having a healthy immune reaction and a gag reflex against big tech. And this is embodied by the fact that we are no longer worshiping at the idol of many of these quote unquote geniuses. I think we got this right.

A lot of individuals are going to jail. This also punctures the basic bullshit notion that regulation hampers innovation. Bitcoin and Ethereum and Coinbase have skyrocketed based on the fact that they're bringing some regulations and protocols and some rules and rule of law into what has been a Wild West and basically a levered Ponzi scheme. And the SEC is kind of a regulatory agency to sort of refound their macho, if you will, or their mojo. Also, the decline in the favorability of Tesla and of Elon has declined dramatically. I think people are getting sick of that rap. Anyway, ad ecosystem faces chaos. We predicted this last year. That wasn't a very bold prediction. I think we got that right. The number of homes with cable

TV has fallen under 50% for the first time ever. And we're also seeing a dramatic decline in revenues. These aren't even inflation adjusted. If you look at inflation adjusted numbers, essentially just in the last four years, you've seen about a 30 to 40% decline in broadcast advertising spending. That is legitimately a meltdown. We're seeing digital video, obviously usurp analog video. The SAG strike or the SAG-AFTRA and Rider strike was nothing but a transfer of wealth from traditional linear companies to Netflix. These individuals will make less money than they were making before. They struck at exactly the wrong time. In contrast to when the automobile or the UAW struck, the auto industry is actually fairly healthy. There

aren't a lot of people that want to install heated car seats, but every kid who wins most popular or best actor in high school ships off for Hollywood. There are 170,000 people in SAG-AFTRA and only about 20,000 actually make a living. Only 12.5% of those union members even qualify for health insurance, meaning they make more than $23,000 a year. Here's some advice to you kids. If you go into an industry, go into an industry that has greater, greater than a 10% or 12% employment rate. But ad revenue continues to be a zero-sum game. It always hovers somewhere between one

and one and a half percent of GDP. And the 10-ton elephant in the room here, Simple, is the largest propaganda tool in history. TikTok, we predicted that the tech of the year would be AI. This seems obvious in retrospect. It wasn't as obvious 13 months ago. We got that right. The U.S. reasserts dominance. I think we got that right. We have essentially the Goldilocks economy here in the U.S. We have the lowest inflation across the G7, yet we have the strongest growth. That is almost nearly impossible. Let me repeat that, the strongest growth of any G7 country while maintaining the lowest inflation. That's almost

economically impossible. It is literally the Goldilocks economy here. Now, granted, we aren't sharing that prosperity with young people as through a series of policies weaponized by people of my generation. We shove more capital from young people into the hands of old people. We have done nothing over the last 40 years, if not transferred wealth from young people to old people who can no longer afford a home. They can no longer afford education. They can no longer afford health care. But we got to take care of our seniors. It is literally criminal. It also appears that those three quarters of a trillion dollars we spend each year on the military, more than the next nine largest militaries combined,

does have some benefits. I would argue that the thing that has cauterized the conflict in the Middle East from spreading to a regional conflict is the two carrier strike forces sitting off the coast of the Mediterranean that are basically saying, we'll rain violence on anyone that starts a multi-front war with Israel. And essentially, I think a lot of the problems in the Middle East are a function of the void left when we vacated from the Middle East. I think this was a huge geopolitical error. It was supposed to be a pivot to Asia. It wasn't. It was an excuse just to get out of the Middle East. And it's created an enormous power vacuum. But still, we can deliver more military firepower than any nation, but with the exception of two or three within five days to any region in the world in terms of our carrier strike forces.

So what did we get right? Ad ecosystem faces chaos, tech of the year, AI, U.S. reasserts dominance in streaming consolidates. What we got wrong was ByteDance breaching a trillion dollars in value and Disney acquiring Roblox. We also got the Patagonia Vest recession, correct. Amazon Alphabet and Meta would have the most profitable years. Best performing stocks, we're giving ourselves sort of a sideways. We got two of three there. Peak personal genius, I think we got that right. Tesla post-record revenues and profits in the stock halves, we probably got that wrong. We'll be right back. 2024 predictions. Okay. The metaphor we're going to use here is what is kind of the ground zero explosion or detonation and what are the second

order effects as a means of talking about our predictions. So there's a housing crisis. One of the unintended consequences of raising interest rates 500 bps in 15 months is that essentially Chairman Powell planted all these IEDs, unexploded IEDs, in every home because people can't move because of the low interest rate mortgage they have. As a result, there's been a lack of liquidity despite interest rates skyrocketing, believing, or logically you would think that increases the monthly expense on a mortgage, meaning that the prices would have to come down, make them more affordable. That hasn't happened because there's no supply. So I do think this is going to end as more mortgages come up and as more individuals, the pent-up demand of death, disease, divorce, household formation creates just an inability to stay put, if you will. I think 2024 is going to see a vast acceleration in home sales.

We're also going to see, you're going to hear a lot of business stories about the rise of alternative housing, and that is new forms of smaller modular homes as people decide they want to have some sort of household formation or own something but need sort of more innovative ways of entering into the housing market. I also think that the travel market is going to continue to boom because a large portion of 20 and 30-somethings have effectively given up on saving for a house, so they spend the money on going to Coachella or going to Thailand. So I think you're going to see travel stocks continue to boom. Expedia, I think, had the best performance in the S&P 500 outside of Meta, largely because

they have wins at their back as people are no longer, young people are no longer saving for a home. They've just given up. We're about 3 million homes short every year of what we need to meet demand. Just some examples of how we are. I don't know what's the term, fucking the young. Essentially, the median house price is up 2x, median monthly rent up 3x,

and the median income is up basically flat. So me and my colleagues have figured out a way to on an inflation-adjusted basis, triple the cost of education, gasoline's up 40%, rent and housing up, all the things that young people can't avoid. And yet we've decided not to pay them more. We still have a minimum wage of $7.25 an hour. And what do you know, they're not having kids. We are going to enter into what I think is an existential crisis, and that is we're not going to have enough young people supporting

old people who continue to vote themselves more money. And pretty soon we're going to have nursery schools are going to have all these seniors outside the school looking to catch a glimpse of this rare snow leopard tiger called a young person. In Japan, there are now more adult diapers sold than diapers for babies. The American dream has become a hallucination. Medium home prices continue to vastly accelerate well beyond the pace of median household incomes. The only way you could bring housing back to affordable levels is if you saw a 35% correction, a 4% decline in interest rates, or 55% growth in income, which basically means we're in for a long road here in terms of affordability.

It's unlikely any of those three things would happen. The median age of homebuyers has gotten much older. This just struck me. Repeat buyers, average age is 58. All buyers, the average age is 49. About 40 years ago, that was high 20s or low 30s. And now the average age of all buyers of homes is almost 50 years old. In addition, almost 40% of them pay all cash, which just gives you a sense that basically the American dream has been sequestered to older people who have a lot of money. Also, old people aren't dying and they aren't moving into assisted living facilities. They're staying at home, which has also reduced housing stock. This is difficult or will probably

have some knock-on effects in terms of the strain on government resources as we have more and more old people. And over the next several decades, they won't have the same savings vehicle or forced savings vehicle that is a home. The majority of Americans cite their home as being their biggest asset. And it's not necessarily because housing outperforms other investments, but because it is a form of forced savings. Consumers will generally or people will generally spend all of their current income. And the mortgage is, if you will, sort of a forced 401k, if you will, because people are very remiss not to make their mortgage payment. And we're going to lose that forced savings vehicle if a lot of people don't start investing and forming homes and acquiring homes with our traditional mortgage-backed homes. The pending home sales index is at its lowest point in 20

years, and it looks like it's going lower for the next three to six months. I think you'll see a boom in housing in the back half of next year. As you can see, there seems to be a rhythm to it, and we seem to be at the trough part of the cycle, if you will. Alternative dwelling unit permits are skyrocketing. The market is responding around different types of alternative housing, and I think you're going to see a lot of this type of new sort of innovative housing produced. In California, you get up to $40,000 if you apply for one of these permits, Vermont 50 and New York 125. There's also a lot of people trying to fill this void by doing things as bold as starting actual new cities, starting and incorporating new cities

to bring on literally hundreds of thousands of new units. They've gotten a lot of shit for this and people don't trust these people because of their association with big tech. I think it's a good thing that these individuals are thinking about ways to create massive amounts of new supply and housing.

And it's no longer the American dream. People just started giving up on it. Used to be nine in 10 people saw it as the American dream. Now about half of America have just started giving up on it. The result is, again, I think that travel stocks are going to outperform the market over the next 12 months because if you finally finally just throw in the towel and say we're never going to afford a house, well, fuck it. Let's spend three months on the road. Let's do Airbnbs or let's travel. Let's go to Rio this year because we're no longer putting away three, five hundred, a thousand dollars a month hoping to saving for a house as that has become, again, out of reach.

The most dominant sort of blast zone, if you will, in media is a 17-year-old TikTok consumer and creator. There's 1.7 billion people on TikTok. Half of them are creators or 850 million creators on TikTok. There's a half a million people working in streaming media, 850 million versus half a million. Now, granted, these people are not as talented as these people, but let's assume one percent of TikTok creators are as talented as the median person working in streaming media. That means there's eight and a half million very talented people producing content for my TikTok feed instead of when I go upstairs and watch Squid Games. Over time, that will wash over traditional media. And guess what? These individuals don't go on strike or they're not demanding health care, at least not yet.

This is creating huge pressure on Hollywood and traditional media. It's not Bob Iger or David Zaslav paying themselves tens of millions of dollars that is hurting traditional media, the traditional media ecosystem. It's a 17-year-old that has no desire to watch cable TV or even Netflix and has decided just to stare at their phone. If my 13-year-old had his way, he would go into his room, put on diapers, and watch TikTok until he passed out and not have to take bathroom breaks. The Hollywood ecosystem is going to continue to struggle. It's going to invite an activist, Warner Brothers or Discovery Warner Brothers. That stock has been beaten up pretty badly.

And we're going to see a ton of continued consolidation and mergers. Why? Simply put, the most important person in the world in the ad ecosystem, a young male. Why are they most important? Because they buy stupid shit because they're in their mating years. So they're most important to advertisers who sell stupid products at a high margin that we don't need. And those individuals just aren't watching broadcast or ad-supported television anymore. Other than sports, maybe they're watching TikTok. So who are the big losers?

Ad-supported media, Hollywood creatives, linear TV, obviously, and the winners, sports, still the only media that people watch live such that they can voice commercials around South Korean cars and light beers and opioid-induced constipation medications on you. YouTube is one of the more underrated platforms. It continues to garner share. I still think TikTok is the most ascendant platform in technology, or essentially in media. And then Netflix continues to win, although I do think we're going to see increased pressure on Netflix in 2024, but we'll talk more about that. And obviously, generative AI is a winner. Chat GPT is not good for the creative community. It's not going to displace jobs. The person who understands chat GPT is going to take your job, but we've already seen some pressure.

So the percentage change in monthly freelance jobs, you can see a distinct decline in the number of these freelance jobs when ChatGPT was launched. And we're also seeing that the earnings is starting to fall off a cliff once ChatGPT was there. So my stock picks, and this might seem a little contraindicator, I think Disney and Warner Brothers Discovery are going to do really well this year. I think they're both going to be put into play. They have become distressed assets. They are now trading at some of their lowest

multiples in history. It's not because these guys will do anything that deft or that brilliant. It's because, quite frankly, they've just gotten so cheap, they're going to attract a lot of sharks. They also are single-class shareholder companies, meaning that they're breakable, if you will, that someone can come in and start rattling their cage. I think Warner Brothers Discovery probably gets an activist investor in the next 90 days. Prediction for 2024, TikTok comes for Netflix and Spotify. I think this platform is so ascendant and the idea of not having choice is so powerful that TikTok will start expanding and coming after, will start being the disruptor of disruptors. And I think it's going to actually start to eat into Spotify and even start to eat into Netflix's business in 2024. There will be evidence that Netflix's

growth is slowing, especially in the U.S., because of pressure from people who began to get their media from TikTok. I also think it just makes a lot of sense in terms of putting together the ultimate playlist for you. I think Spotify, which has seen its stock run up in the last month, is going to come under pressure as evidence begins to appear that TikTok, people are now turning to TikTok to put together playlists. I also think that traditional movies are going to start parsing and putting all of their entertainment and full movies on TikTok. So think about this, and I've said this,

the key to building multi-trillion dollar companies is to build a time machine. And Netflix built a time machine. If you only let your kids watch Netflix versus ad-supported television, your kid saves 11 days a year of watching TV commercials because kids watch so much TV. But Netflix is being Netflixed by TikTok. And that is each year, each year you're going to save effectively about 40 hours of deciding what to watch if you just watch TikTok. And again,

I think people would rather make decisions or save their finite decision calories for something else. Also, it just has such incredible signal liquidity. When you watch something on Netflix, it gets two or three signals. Did you watch it all the way through? Did you start to watch the next program? How many times did you stop watching? Whereas within the same hour, TikTok will get hundreds of signals that helps calibrate in very quickly on one cable channel, one series of programming that foots to your needs. And it kind of delights you, but doesn't surprise you because you don't need to pick anything. So my big tech stock pick, last year I picked Meta. This year I'm picking Alphabet. Why is that? It looks relatively cheap relative to its peer group. Meta's had such an extraordinary

run. And also they have such a diversified business. Meta's business is not that diversified. And while Google gets the majority of its earnings from its ultimate toll booth called Search, it does have some other interesting businesses. Its cloud business continues to grow at 20 plus percent a year and its core business is still growing double digits. Also, people underestimate the power of YouTube. In terms of its revenue, it's bigger than Spotify, Snap, X, New York Times, Paramount and Pinterest combined.

Also, YouTube does have an advantage, a strategic advantage over TikTok in that India doesn't have its head up its ass and has decided to ban the CCP's blowhorn and won't let, has banned TikTok from India. This gives YouTube a big leg up, specifically about a half a billion legs up on TikTok, where it registers 460 million users versus zero on TikTok in India. And India, as we'll talk a little bit, will play an increasingly important role in analyst calls as India kind of becomes the new China when the second or third question in every analyst call is, what is your business or how is your business in India doing? We're now saying YouTube is bigger than Netflix and bigger than any cable or streaming company

in terms of time spent. Next prediction, peak AI. And that is the valuation in AI has peaked, I believe, and also that the empire strikes back. And that is specifically Alphabet and Microsoft come for traditional AI companies. I think that the majority of the AI revenues are going to go to existing players, not to new players. Open AI is a phenomena at a $90 billion valuation. I would argue it's fully valued, and I don't think its

value is going to increase. Essentially, 80% of the new unicorns are AI-driven, and their valuations reflect this. The valuations have gotten frothy, if not a little kind of insane in this category. This is the valuations on Anthropic and OpenAI as a multiple or a price-to-sales ratio. So essentially, OpenAI is now worth more than all of these companies combined. If you think about it, OpenAI was sort of similar to Netflix up until sort of 2019. And that is it kind of had Greenfield running room. I think Sam Altman is a brilliant person. I thought he was going to be Times Person of the Year. It wasn't. It was Taylor Swift. Okay. That seems reasonable. Don't get it. Don't get it. Anyways, that gets a lot of hate, by the way. That gets a lot of the original IP there, incredible interface. It just strikes me that they have probably had kind of a five car alarm and it's pretty much an all hands on deck. I also thought that the Gemini introduction

or product launch video was really compelling. And I think that just their interface and so much of their assets foot to them being a dominant player in the space. I think it's kind of the best metaphor would be Apple waiting, watching, listening, kind of the second mouse that gets the cheese in the smartphone market. And I wonder if we're going to look back and think that Google's entry into AI, specifically Gemini, will track or call on memories of how Apple came into the smartphone market.

The returns so far on the market have largely been clustered around a small number of stocks. The S&P is flat if you take out just seven stocks. I mean, essentially, it's no longer the S&P 500, it's the S&P 7. And all of these stocks that skyrocketed are largely an AI story. The value added of AI-inspired market cap games of new and existing players is about $3 trillion. I mean, this is just striking. Now, having said that, I think this market is fully valued. We'll be right back. What is the greatest threat and the actual greatest impact on the ground of AI?

I think the greatest threat is hands down is loneliness. Searches for AI girlfriend are skyrocketing. One in three men under the age of 30 has a girlfriend, two in three women. Why? Because women are dating older because they want more economically and emotionally viable partners. We're not producing enough of those in terms of young men. Its greatest impact on a kind of a ground level will be, I think, that AI will be deflationary. I think that in a lot of industries,

if you look at core inflation and what has been sticky about inflation, it's been wages. And I think the AI and the threat of AI is going to make people who go into their annual compensation reviews less confident to ask for raises. And I think ultimately technology is very deflationary. And I think you're going to see inflation come down to its Fed target by Q3 of next year as AI will be ultimately deflationary in a services economy where wages have been very sticky. And again, look what's happening here.

Tech CPI continues to pull down average CPI. And nine in 10 Fortune 500 companies are investing a great deal of money in AI, not for new products, but to bring down costs. The technology of the year for 2024, GLP-1 drugs, or specifically GLP-1 technology. What you have here is a technology that is essentially scaffolding on our instincts. Since we've come off the savanna, we had an absence of salty, sugary, and fatty foods, an absence of mating opportunities,

an absence of secure, safe opportunities for play. The result is addiction to trans fats, obesity, diabetes, addictions to porn, addictions to gambling. Essentially, our instincts have not caught up with the institutional superabundance economy. And to a certain extent, GLP-1 drugs aren't just food suppressants or appetite suppressants, they're craving suppressants.

And I think this is gonna have a huge impact on our economy. As a matter of fact, and I've said this and I got shit for this on Bill Maher, but I wouldn't be surprised if GLP-1 drugs have a greater impact on our economy than AI. Why? Obesity-related costs are $1.7 trillion in the United States. It's everything from the industrial food complex to the diabetes infrastructure to hospital networks to insurance. We are a nation that basically a big part of our economy revolves around the expectation that people are going to continue to be obese. Obesity has killed and continues to kill way more people than any pandemic. It's the number one preventable source of death. And again, $1.7 trillion in obesity-related illnesses, 260 million adults, 70% of them are overweight or obese. 70% of Americans aren't anything other than overweight or obese. And on

the far left, we have decided that you're finding your truth when you're obese. No, you're not. You're finding diabetes. We need to stop all this bullshit around romanticizing people who are unhealthy. And I think GLP-1 drugs are going to attract a ton of capital and change our approach to food and cravings and addiction. There's just so much interesting research coming out of this. You're twice as likely to be depressed when you're overweight. We're finding that people who take GLP-1 drugs are not only eating less food, they're drinking less alcohol, they're biting their nails less. I think there's going to be all sorts of interesting side effects here, including reductions in gambling, which is the number one killer in terms of the percentage of people who commit

suicide because if you're addicted to meth, people figure it out and intervene, or hopefully they intervene. When you're addicted to gambling, a lot of times people don't know you're in trouble until it's too late and people decide to take their own life. And I think it's absolutely going to wreck a bunch of stocks. I think you're going to see hospital complexes, pharmaceutical industries, medical supply companies, anything that services this $1.7 trillion economy. The market is a forward-looking indicator trying to look around the corner. And I think it's going to look around the corner and see a lot of Americans getting a lot thinner. And look what's happened. Nova Nordisk is now the

most valuable company in Europe. And we're seeing all of these companies that could be impacted by the scaffolding on our instincts start to take a hit. And as I said, it could even reduce gambling. So General Mills, Coca-Cola, Pepsi, and McDonald's, you could argue, are great, well-run companies. Essentially, they're obesity indices. And that is, as obesity has increased from 30% to 40% in the last 20 years, these companies are up 7 to 10- fold. So if obesity starts to go down, you're going to see these companies register the same sort of deceleration as acceleration in their stock prices. And we're already starting to see it in all sorts of different stocks. So some of the aftershocks, airlines are saying they're going to save a ton of money because I didn't realize

this, but fuel costs are their biggest costs and the fuel costs are much greater for someone who's obese versus someone that's thin. I think it could inspire, at least this is hopeful, a baby boom. I think feel better about themselves, start dating again, feel more attractive,

more confident in their sexuality when they're in good shape. I also think you're going to see a boom in fitness and sports. And also it should be good for clothing firms as people's body size changes, they're going to want new outfits. What I think is most interesting about this is that the most prescribed region or the region that has the greatest prescription penetration of GLP-1 drugs is actually the

thinnest region in the United States. And that's the Upper East Side. Why? Because it's not obese people this drug is reaching right now. It's ladies of lunch who want to lose that last 10 or 15 pounds. So hopefully the excitement, the investment will create more GLP-1 drugs and these drugs will finally start getting to the people who really need them. Swing states, a small number, less than 100,000 people are going to dictate what happens. Soccer moms in Ohio are going to decide the fate of the war in Ukraine. What do I mean by that? Small number of counties in a small number of states. This actually is not accurate. It's probably Nevada, Minnesota, Wisconsin, Michigan, and Georgia that will determine the election. And not only that, it's not the states, it's a small

number of counties. So swing states have a disproportionate amount of control, but we also have swing states in the world. And specifically, I think the kingdom and India are going to play an increasingly important role geopolitically as they become the swing states between a Europe and U.S. bipolar and China and Russia, increasingly bipolar society. I think the swing votes, if you will, will be the kingdom in India. And we're also going to see India is now the fastest, is now the biggest nation in the world, and it's adding more people to the consumptive middle class than any other nation in the world. I do think that India, for economic purposes, is in fact the new China. And we're seeing that in terms of stock market returns. I think, and I've gotten some shit for this, I think the kingdom's pivot to capitalism

is the most significant thing geopolitically of the last decade. And my observation is purely anecdotal, but I was in Mykonos this summer. I noticed that the majority of people at the kind of quote-unquote hotspots were from the Gulf. And I think that the younger, wealthier generation in the kingdom has pivoted away from Islamism to capitalism. And I think that if you look at the kingdom's reforms, I think you could make an argument that it's actually the most aggressive reformer of any nation in the world. Granted, they're starting from a bad place, but the reforms here are pretty dramatic. And I think that we couldn't have written a better script in terms of what benefits the West. And I think that's going to have huge geopolitical ramifications, both India's

growth in terms of its consumer class and the kingdom's pivot towards capitalism away from fossil fuels and embracing Western values, if you will. Their share of GDP coming from fossil fuels is declining. They know they have a limited amount of time to make this pivot and they have the capital to do it. And they're investing in startups. I think this is a wonderful thing for us. And I think the closer we integrate with India and with the kingdom, arguably speaking, the more powerful the U.S. will be if it incorporates or co-ops those swing votes. They have decided to become the ultimate soccer mom and invest in what is the greatest ROI branding in the world, and that is to own a football team. Why? Because it's like advertising on Bloomberg or CNN. You see those invest in India commercials,

except in 10 years, you get all of your money back and more. Okay. Inflation in the U.S., stagnation in China, inflation across Europe and U.S. is a big threat. That's when people get really angry when the cost of diapers and lettuce goes up, and we're starting to see stagnation in China. I think all of this can be solved by what would be the largest corporate tax cut or largest global tax cut in history, and that is if the U.S. and China kiss and make up. That supposedly is not happening, but I do think there's just too much incentive for these two nations to combine their IP, their capital, and their manufacturing might to bring the cost of all products globally down, reignite their economy and bring our inflation

down. It just seems like this is a marriage made in heaven and that they will kiss and make up. I do think there's going to be a thaw in the last half of 2024. I think China's tempering their aggressiveness. I think they've been somewhat humbled by a slowing economy. And I think the only thing that threatens Biden's reelection is if inflation were to kick back in. And all of these things add up to this partnership or renewed partnership between, again, the manufacturing might and the spending power of the United States. I must include the control of X and Twitter. You have never seen or I've never registered. I challenge anyone to find a company that's had a greater implosion that does over a billion dollars

in business than what has experienced at Twitter. I can't think of a single company in history that does more than a billion dollars in revenue that has seen its revenues decline 54% in one year. The implosion here is just historic. We the last latter half of the year, be the year of alternative housing. We'll have a sugar high continue in travel stocks as young people give up on buying a home. Paramount and they're going to be put in play. We're at peak AI in terms of valuation, and we're going to see revenge or the empire strikes back in terms of Alphabet. That's my big tech stock pick. TikTok begins to be the disruptor of traditional disruptors and puts pressure on Netflix and Spotify. Our big tech stock picks see above the empire strikes back as Alphabet. Tech of the year in terms of real impact on the real economy, are going to be GLP-1 technologies and drugs. India is the new China. The Kingdom and Israel normalized relationship. I think that their pivot towards capitalism and having a technology partner creates incentive

for them to normalize relations. I think that will happen. And I think U.S.-Sino relations saw in the last half of last year, I think Musk loses control of or sells Twitter, his adventures in media, I think, or our national nightmare, hopefully going to be over towards the back half of the next year. Meta's next growth vehicle is going to be Snapchat based on its growth in India and its need to replace or supplant Instagram as a growth vehicle. I think Snapchat is kind of the sleeping giant.

Excuse me, not Snapchat. WhatsApp. The biggest impact on AI is loneliness, specifically among a cohort of young men who are exiting traditional relationships and having low-risk, low-cost entry relationships with screens and with algorithms. Finally, I think Biden is reelected and Trump is sentenced. The former president is under 93 federal indictments in four different jurisdictions that have prosecution rates between 71 and 93 percent, meaning the odds that he is not convicted of at least one is about one in 700. And even if you say, well, what if there's a never-Trumper? It's different. He's a president. I just don't think statistically or mathematically he doesn't avoid one of these resulting in a conviction and a sentencing. And according to polls, 7% of his voters would not vote for him

if he was convicted, which is incredibly a small number of a hardened base when you think about it. But it's dramatically more than he needs to lose to lose the election. So I do think he is going to be sentenced. And I think that Biden will be reelected. It's also very unlikely that an incumbent president ever loses when the economy is strong and see above Goldilocks economy. And finally, Arsenal wins the Premier League. That's right. That's right. The unrivaled attack of Bukayasaka, the sublime body and ball control of Martinelli, and the amazing name of Jesus. Jesus Christ, if you're named Jesus,

you are going to beat Man City. What kind of name is Man City? What kind of name is Man City? Man City. That makes no sense. I'm coming out of the closet as a gooner. Arsenal wins the Premier League. And finally, my hope for 2024 is that some men,

specifically the wealthiest man in the world and the former president, reach down, find their testicles, and start acting like men. And that is they become protectors and providers and start being mendacious fucks, platforming depravity and platforming cruelty. My name is Scott Galloway, I teach at NYU, and I appreciate your time.