The Prof G Pod with Scott Galloway - Office Hours: Using AI for Stock Picks, Overcoming Fear of Public Speaking, and How Do You Talk to Your Kids About Religion?

Episode Date: June 14, 2023

Scott gives his thoughts on using AI to pick stocks and make profitable investment decisions. He then advises a listener to conquer their public speaking fears, especially after a negative experience. He wraps up with his thoughts on navigating complex topics, like religion and spirituality, with your kids. Music: https://www.davidcuttermusic.com / @dcuttermusic Learn more about your ad choices. Visit podcastchoices.com/adchoices

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NMLS 1617539. Welcome to the Prop2Pod's Office Hours. This is the part of the show where we answer your questions about business, big tech, entrepreneurship, and whatever else is on your mind. If you'd like to submit a question, please email a voice recording to officehoursatprop2media.com. Again, that's officehoursatpptimedia.com. First question. Hey, Scott. Eli here, calling in from Boston. I'm relatively new to the show, but I found it very enjoyable and insightful so far. So thanks for doing what you do. Over the years, I've developed a passion for investing, which is probably a good thing to do considering I don't want to retire broke. While most of what I do is generally index funds,

I do like to set aside a little bit of money to play around with and develop my investing strategy. So I'm not sure how much you or others have read of Ray Dalio, but in his books, Ray discusses how at Bridgewater they use computer algorithms and tons and tons of historical data in conjunction with human decision making to continuously develop their investment strategies and principles. So my question is, with the recent breakthroughs in technologies like AI and chat GPT, how can one leverage these technologies in addition to the algorithms and the historical data and the human decision-making in order to continue developing the sound and profitable investment strategies and

really kind of bring that idea forward into the 21st century, utilizing the new technologies that become available. So thanks for your time and for considering the question. What I tell people in my upcoming book, The Algebra of Wealth, Achieving Economic Security, take between 60 and 80 percent of your savings that you invest and put them in low-cost, diversified index funds or ETFs. That's just the way to go. That's your insurance policy. That's your no-brainer. I need economic security at some point. However, if you want to and you're interested and you're curious, I don't think there's anything wrong with taking 20, maybe 30, maybe 40% if you're

super into this stuff and get a lot of psychic income from it and want to learn and maybe feel like this component or investing in the markets are going to be a component of what you do professionally and do your own stuff. And some of doing your own stuff might be prompting ChatGPT with a bunch of questions around identifying stocks. And if you look at TikTok and type in ChatG GPT and stocks, you're going to get a bunch of people telling you what are the right prompts. It's really interesting. When I try and describe generative AI, I think of it as the world is being eaten by software. We are automating the world with technology such that

instead of someone, a person with a shovel digging, we have an excavating machine that can scoop out thousands of pounds of dirt at a time. And slowly but surely, that machine became run by software that made it more efficient, more elegant, more inexpensive. The real breakthrough here is that the new programming language that is the pillar of the substance of the way you build the mechanism that is invading or taking over the world, the new programming language is English. And so to get really good at prompts sort of turns you into an engineer. So what I would suggest is taking some of your money and trying to get really good at asking the right prompts and identify some stocks and start playing with it. I don't like day trading. I would try and identify three or five stocks that you'd be comfortable for holding for

at least a year. Why? Because about 51% of stocks go up on any given day, meaning 49% go down. But if you buy five S&P stocks and you wait 10 years, no one has ever lost money. And even the return here is not only going to be financial, but it's going to be educational because you're going to start learning about how to use generative AI for other parts of your life. But I like the idea of trying to use AI to identify stocks. Some data, Motley Fool surveyed 2,000 Americans and found that 50% of participants

have already used ChatGPT for stock recommendations. Can you get over that? 50% of people have already used it for stocks. And three quarters of high-income Americans surveyed and said they had used ChatGPT for stock recommendations. My God, that's amazing. Recently, Finder conducted an experiment to test ChatGPT stock recommendations against the 10 most popular funds in the UK. Over the same period, the ChatGPT portfolio outperformed the other funds and also the S&P 500 index. Additionally, researchers from the University of Florida found that ChatGPT could predict stock price movements more accurately than other analysis models. This is so exciting. I wonder how much of this is confirmation bias, where people are so excited about this technology that they're only publishing studies when it does outperform. It's not that interesting

to release a study saying it didn't do any better or it did worse. But if you think about this, the fact that AI is so ubiquitous, does it really provide some sort of differentiated investments? Does it really create alpha? Because over time, shouldn't the LLM be able to identify every means of identification that's working, recommend those to other people with similar prompts, which should starch out the above-market returns, and the returns should go to not only market, but maybe even below market, because so many people are asking it the same questions. I don't know. I was an investor in a machine learning hedge fund for my friend and colleague, Vasant Dhar, who's one of the brightest scholars in the world of machine learning. And Vasant would

write algorithms in his team to try and pick up on signals and correlate those signals with price movements and then bet on those movements. And it is such a difficult business because it's a short-term business where you're closing out your positions every day. And the best advantage, the best way to have guaranteed win in your sales as an investor is patience and time and diversification. And when you go into the business of short-term trading and quant strategies, you are competing against thousands of PhDs, lightning-fast broadband, amazing technology, tens of millions of dollars of investments made by the incumbent firms. That's who you're up against on the other side of a trade. And so I think this is something you want to limit the amount of capital that you're going to invest

in it. But even if you don't do well financially, I think it's going to be worth it just to learn about generative AI. Sorry for the long-winded answer, and thanks for the question. Question number two. Hi, I recently presented at an e-commerce expo whereby, trying to channel my inner prof G, I found myself stumbling over my words and forgetting a couple of key points. Thankfully, I managed to deliver the core message, but I totally lacked the necessary charisma to make the presentation memorable. I'm not expecting to be asked back again. Everyone was very polite, but it was a real blow to my self-confidence. So my question is, how do you prepare for your presentations? Have you ever delivered any poor presentations?

And how did you bounce back? Thanks. So question number two person, I didn't have your name. I present for a living. I have a lot of practice. I stand in front of 160 or I used to, I'm not teaching right now, but when I teach, I stand in front of 160 to 300 27 year olds, you know, young adults range in age from like 23 to 50, and try and deliver a story that's compelling and that makes them feel as if it was worth $140,000, which is the tuition they are paying for that one session. When you take everybody in the class times the $7,000

they're spending to take that class divided by 12, you end up with $140,000 per class. That is very motivating. My father, some of it's genetic. My father was a very good storyteller. He would enter a room and ultimately a semicircle would begin to coagulate around him or form around him because he had such a great turn of phrase, great sense of humor. He was so articulate. So I have some genetic advantages around this. So practice genetics. And still, I get panic attacks. I was a DLD. I think it was a DLD in front of a couple hundred people. Went out on stage, felt my heart pounding.

I started thinking, why am I so hot? Do I have fever? Realized I was sweating. And then I began literally gulping and gasping and drinking in air. And I had to bend over and put my hands on my knees. And I thought I was going to die. I thought I was going to pass out. And that happens to me about one half a percent of the time I present. I've looked at when it's happened and I can't figure out. I've done it with small crowds. I've done it in front of 10,000 people. It just

doesn't seem to, I think it might have something to do with jet lag, but be clear, boss. Everybody, everybody has that moment where you walk off stage in front of a bunch of people and you're like, oh, fuck. I mean, that was awful. And there's a few things you want to remember and a few action items. The first is people are so focused on themselves. They'll think, oh, that was a shitty presentation. And then they go back to thinking about themselves. That helps me when I do something stupid and I'm embarrassed. It helps me to recognize that while I may be thinking about how bad I was, nobody else is for longer than two seconds too. To get back on

that horse, maybe just start recording some TikToks on a topic. Do YouTube videos and start really understanding your presentation style and getting more comfortable. This really is an issue of practice. In addition, when you get back on stage, what I find is really helpful for me is slides. I either need to be interviewed by somebody or I need slides. For me, just to stand up on stage, I did this talk at Summit at Sea, which is basically what people call Learning Man. It's a bunch of millennials and Gen Z who go to these TED-like talks during the day, and then I'll do mushroom chocolates at night, which is fine. In other words, it's awesome. Anyway, for a brief moment, I was about to do my session, my slides didn't come up. And I thought, okay, I got an hour on

stage, and I'm supposed to just wing it. And that was a lot of panic for me. And I feel confident and as if my shoulders are six feet broad when I I walk out there and my team has collected a ton of data and I have compelling slides and I can ping through them, I usually do, I mean, I go overboard. I'll do 140 or 160 slides in a 40-minute presentation, and I'm known for that. But I find that the slides are a huge source of comfort for me, because if I forget where I'm going, I just look back up my shoulder and I kind of see the outline or the visual of where I'm supposed to be. And so, one, acknowledge everyone is shit scared. It's like very few people are comfortable around snakes. Very few people are comfortable speaking. Two, if you do fuck up, yeah, you fucked up. No one else is thinking about it

but you. Three, get back on the horse. start doing some videos in a controlled environment that give you more comfort. And four, visual cues such that you have a co-pilot on stage. And also, also, I just sensed in your voice some disappointment. Forgive yourself. Forgive yourself, said the guy that was literally gasping on stage who people wanted to take to the hospital after I got off stage. That was humiliating and embarrassing. This year, I'll do several million dollars in speaking fees. That was a humble brag. We have one quick break before our final question. Stay with us. The Capital Ideas Podcast now features a series hosted by Capital Group CEO, Thank you. And how do they find their next great idea? Invest 30 minutes in an episode today. Subscribe wherever you get your podcasts.

Published by Capital Client Group, Inc. I just don't get it. Just wish someone could do the research on it. Can we figure this out? Hey, y'all. I'm John Blenhill, and I'm hosting a new podcast at Vox called Explain It To Me. Here's how it works. You call our hotline with questions you can't quite answer on your own. We'll investigate and call you back to tell you what we found.

We'll bring you the answers you need every Wednesday starting September 18th. So follow Explain It To Me,ented by Klaviyo. Welcome back. Question number three. Hey, Prof G. This is Matt from Seattle. Love the podcast, love the content, humor, and love your insights on parenthood. I'm a proud father of a four-year-old daughter and two-year-old twins, one boy and one girl. Aside from the standard household craziness, all is well. My wife and I have good jobs. Kids are healthy and supported by a loving family and community. Needless to say, they're off to the races. More recently, we've been having interesting conversations with our four-year-old as she becomes more aware of herself and the world. Literally conversations around life, death, God, and where do we go from here? I don't have the

answers, but these questions are so fundamental to our ability to navigate our day-to-day. A little more context, my wife and I were both raised in the Catholic Church. We are not practicing Catholics now, but I would say that, at least for me, my Catholic upbringing still provides a foundation for my belief system. When I find myself in challenging situations, I pray. I'll be honest, I have no idea who I'm praying to, but I find this foundation to be incredibly helpful in navigating daily life. So my question for you is, as a parent, how have you addressed these questions around life and death, faith and religion with your boys? Any advice on how we might provide the foundation for our kids to be inquisitive and explore these deeper questions, perhaps through religion, but perhaps not? And finally, isn't it the greatest joy to watch your kids become cognitively aware

of themselves and the world? What an awesome, awesome experience it is to be a parent. Thanks so much for your insights on navigating all facets of life, including parenthood and being a supportive father. Thanks. So Matt from Seattle, I don't know what the church you're involved in.

I hope you take a leadership role in your church. You just strike me as such a generous, thoughtful, compelling person. I hope that you are around young people. And you just strike me as someone who would give people a lot of comfort and a lot of insight. So, yes, let me start with what is the easy part. Yeah, my greatest joy is absolutely hanging with my kids and watching them. And just the way you see them discover stuff. Watching my 12-year-old discover generative AI and playing, I spoke at a conference, an Adobe conference, and they showed me their generative AI, which is Firefly, or their design AI.

And so I said, we got to get Firefly, and we've been using it. And he takes pictures of us playing football. And then he does ridiculous things like he puts different brands of shoes on him when he kicks and puts different animals flying in to play goalie. And it's just the way he approaches things, seeing them discover stuff and how they perceive things. I think it's fantastic. As it relates to religion and spirituality in these discussions, I just think this shit is so personal. I don't know if I have any advice for you.

I don't, and I certainly don't have any recommendations. I can tell you what we do. We talk about it openly. I've thought about if I was a little, if I wasn't so lazy, I think I would probably take my kids to religious services across different denominations because I do think there's comfort in organized religion. Or we talk a lot about the need for third spaces that people need to get together. And my dad was married four

times that we know of. And so I've been to temple a lot, to church a lot, to Presbyterian. I just went to a lot of different religious institutions, and I never bought into Jesus Christ or His lineage. I never bought into the notion of God. I always enjoyed temple. I found that the people running the sermons were really interesting. I found that it gave people a reason to greet each other. I love when they say, please, you know, greet and wish well the person behind you, in front of you, talking about something or being in the agency of something bigger than you in the physical presence of other people. I thought it was wonderful. And we used to do nice things for people. And I also want to acknowledge that religion has also been a vehicle that has delivered massive violence, death, and despair to a lot of people.

So it's a complicated topic. My experience with religion has been quite positive. And it has confirmed my atheism. And that is my religion, if you will. And that is I do not believe. And I tell my kids that I don't think, my kids have asked me, what happens when we die? And I'm like, well, I think it's sort of the same as before you were born. Do you remember it?

No. Was it painful? No. I just think it's nothing. I think it's nothing. And I said, so this is it. And it motivates me. It motivates me to want to be more courageous because I know it's, or I believe it's going to all end. Also, I want to acknowledge that as an atheist, my belief is no less crazy that the world exploded, there was nothing at all exploded into the universe than any religion. I realize my, you know, my views are batshit crazy as well. But I just tell my kids what I think and try and I need to do a better job. I'm glad you asked this question of exposing them to some other religions kids that I really enjoyed in Sunday school. They always used to ask, what would Jesus do? And Jesus, you know, Jesus is a little bit of a role model for me. Love the poor, you know, that's a good place to start, right? Love the poor, always show grace.

And it strikes me that our elected representatives that talk about Jesus, if Jesus came back, he'd find their dust and throw up on them. Yeah. Anyone invoking Jesus a lot in DC is usually someone that's proposing cutting food stamps for single mothers. Anyway, it's a different topic. But I think this is just so up to you and your wife around how you want to approach these issues, how you want to educate your kids. There's some interesting books around this stuff. I've always found you want to be a little bit, I don't know, ideally it's a pull from your kids as opposed to a push. And I love that you pray. I think that's wonderful. I love anything that gives people comfort. I think of Google as being kind of the closest thing we have to God now. A prayer is just a query into the universe, hoping that some all-knowing being will see everything and then process your query and send you back an answer you trust. And I think that is Google. But you're an example for your kids. I think when you tell

them you pray and they ask you, what does it mean to pray? I think when you take them to church, I think when you act in a Jesus-like manner, I think they're going to start to model that. But as it relates to parenting and religion, boss, I'm just not qualified. And I think it's so personal. I really do think it's up to your wife. I'm sorry for not a more definitive answer. I hope that you decide to get involved in your church because I get the sense that you would just be a very positive influence on people. Thanks for the question. That's all for this episode.

If you'd like to submit a question, please email a voice recording to officehoursatproptomedia.com. Again, that's officehoursatpropgmedia.com. This episode was produced by Caroline Shagrin. Jennifer Sanchez is our associate producer and Drew Burrows is our technical director. Thank you for listening to the Prop G Pod from the Vox Media Podcast Network. We will catch you on Saturday for No Mercy, No Malice, as read by George Hahn, and on Monday with our weekly market show. Hey, it's Scott Galloway, and on our podcast, Pivot, we are bringing you a special series about the basics of artificial intelligence. We're answering all your questions. What should you

use it for? What tools are right for you? And what privacy issues should you ultimately watch out for? Hello, I'm Esther Perel, Special series from Pivot sponsored by AWS, wherever you get your podcasts. Hello, I'm Esther Perel, psychotherapist and host of the podcast, Where Should We Begin, which delves into the multiple layers of relationships, mostly romantic. But in this special series, I focus on our relationships with our colleagues, business partners, and managers. Listen in as I talk to co-workers facing their own challenges with one another and get the real work done. Tune into Housework, a special series from Where Should We Begin, sponsored by Klaviyo.