The Prof G Pod with Scott Galloway - Prof G Markets: Breaking Down 2024 Predictions + Audience Comments and Pushback

Episode Date: January 8, 2024

Scott and Ed discuss predictions for 2024 including Scott’s stock picks, OpenAI’s valuation, and the future of Youtube, Tiktok, Whatsapp, and GLP-1 drugs. They also discuss comments from the predictions livestream audience and address pushback on some of Scott’s takes. Finally, we hear 2024 predictions from our listeners. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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NMLS 1617539. This week's number, 34 million. That's how many times listeners downloaded a PropG episode in 2023. Wow. Thanks so much. We are humbled. No, we're not. We fucking rock the house. Welcome to PropG Markets. Ed, what are we discussing today? We're going to go through your 2024 predictions, Scott. And we're also going to share some questions and comments that we received from the livestream audience. And by the way, one of the most frequent comments that we saw on the livestream were requests for you to slow down.

So that's what we're going to try to accomplish today. We're going to do a deeper breakdown of your predictions. Sound good? Yeah, sounds great, except for the slow down part. Let's start with your first prediction, which is housing sales boom. What do you mean by that? Sales will accelerate.

No, look, there's pent-up demand. Death, disease, divorce, household formation. They just, people want to procreate. No, look, there's pent-up demand. Death, disease, divorce, household formation. People want to procreate. They want to buy a home. Interest rates have come down about 100 bps in the last 60 or 90 days. And I think they'll come down further. And in addition, you're just going to see certain mortgages roll. So the incentive to stick around, you can either refinance your house at a much higher interest rate or you can go buy a new one. But it just strikes me that it won't return to pre-pandemic levels, but it's going to be substantially up. I also think going and buying tens of thousands of acres, incorporating it as a city to avoid all nimbiest, restrictive bullshit zoning requirements that basically just entrench and transfer wealth from people looking for a home to the incumbents that already own a home. So I just don't think this is sustainable. And I think we're going to see a lot of pent-up demand come into the market. And I think you're going to see a housing boom in 2024 or a housing purchase boom, I should say. Question from Philip. What about young people who can work remotely? Do you think they will move to so-called second and third tier cities where life is less expensive? It's a

complicated question. It depends where. So for example, a lot of people who moved to Austin are now moving to other cities in Texas because they've been priced out of Austin. Anyone who could engage in the remote work arbitrage has kind of done so. And I actually believe you're going to see a little bit of an uptick or a little bit of a return to the office. We've been thinking about that at Prop G here. I believe that 2024, we need to have more people, I don't want to say in the office, but we need to have a more formal means of getting more people together more regularly. I don't know, I sound like David Solomon or one of these boomer investment banking guys, but I do think you lose something. I think

you're going to see a slight uptick in occupancy rates back in offices. The market for cities is like the market for products. San Francisco prices itself out of the market and is unable to address the homeless problem. So it's both bad and expensive, which means people leave and you see basically the commercial real estate market has collapsed there. And even the rental and housing market for the first time is starting to decline. So I think you're going to see there's certain lifestyle arbitrage cities. You'll see more of those in Texas and Florida because of the lower tax rates. I think Mexico City and Madrid still offer the best lifestyle arbitrage in North America and Europe. But yeah,

that's not anything unusual, but people who still have real money and real ambition, and sometimes it's more important to have the latter than the former, are going to do their who still have real money and real ambition, and sometimes it's more important to have the latter than the former, are going to do their best to get to a super city. And one of my big pieces of advice to young people is before you collect dogs and kids, get to a super city, because that's the density of opportunity, the crush of humanity and capital, the results in that opportunity. You have two stock picks that you call the streaming laggards, aka Disney and Warner Brothers Discovery. Why are they your stock picks for 2024? And it has a park business that's doing $10 billion in EBITDA that really is singular. The park business, in my view, now granted, you would argue that the figures or the IPs, the real moat here, but they leverage their IP with rides at Disney and also just the

moat of building several hundred thousand acre park. That takes decades. It doesn't, you know, Netflix can't do that, or at least they can't do that within 10 or 20 years. And other than MGM Universal or Universal Orlando, nothing even comes close. And so these are iconic assets, it's underperformed. So the stock either has to go up or it's put in play or starts getting hostile bids from potential acquirers. So I think that stock goes up this year. And then I think Warner Brothers Discovery has been,

basically been a debt story. And that is, it has such a huge amount of debt. And David Zaslav, to his credit, has paid down that debt pretty aggressively. And when he pays it down, then the enterprise value, if it stays the same, that means the equity value should go up. Because the enterprise value of a company is what people think is the value of the company minus the debt plus the cash. So as the debt gets reduced, the value should go up. I also think that there's a consolidation in the streaming market that will give Max, or better known as HBO, more pricing power. There's going to be fewer players. They're consolidating. Netflix has already raised prices 15% to 30%, which will create cloud cover for HBO to raise prices.

And they're all cutting costs. They're all reducing their programming lineups dramatically. And the writer's strike was nothing but a gift to them that gave them the opportunity to take a pause and recalibrate their costs. So I like both Warner Brothers, Discovery and Disney as kind of safe plays. I think their downside is somewhat limited. And I think they offer kind of, I don't know, 30 to 60% upside. You also have a side prediction that an activist investor is going to come and approach Warner Brothers. Why do you think that? Well, there's a scene in Wall Street where Charlie Sheen keeps saying,

Why do you need to wreck this company? Because it's wreckable, all right? And Warner Brothers' discovery is breakable in the sense that it has a single class of shares. What John Stanky at AT&T demanded was that if he was going to take stock in exchange for selling Time Warner to Discovery, that he wanted it to be a single class of stock such that the likelihood that a takeover might happen is always there, and therefore there's a takeover premium in the stock there. And therefore, there's a takeover premium in the stock. So a lot of stocks that have dual-class shareholder structures technically trade at a discount because even if the stock gets really cheap, for example, a Peloton or something like that or a New York Times, nobody can come in and make a bid like they did in Macy's

that sends the stock skyrocketing because the Sulzbergers own 2% of the shares, but they control the company. So there is no takeover premium or takeover possibility premium in the New York Times stock. And Stanky said, I don't give a shit about your headaches as the CEO fending off activists. I want to maximize the value of my shares in the company, so I want it to be a single class of stock. So long-winded way of saying Warner Brothers discovery is breakable. And that is somebody could come in and say, I want to take the company, I want to split it up, I want to sell these assets, or I want to swallow the whole thing and make it part of whatever,

make it part of my telco again, or who knows. Somebody is going to pop up, an activist or an acquirer, if this company continues to pay down its debt, which I think it will, even if it's not at the same rate, and shows signs of life and bouncing off the bottom. I also think CNN, which gets a disproportionate amount of attention, because it's arguably the most iconic asset, maybe with the exception of HBO, is going to have a great year because everybody's going to be watching whether or not Trump gets sentenced or whatever dipshit thing Elon says.

I think that CNN CNN during an election year is going to print money. Are you personally buying these stocks? No, I don't buy and sell that many stocks. I'm kind of saving my dry powder for some private investment opportunities. I'm also thinking about selling some stocks. My biggest holdings are Apple, Amazon, and Airbnb. I've experienced really solid, even extraordinary gains in those. And I'm thinking of getting out of them and diversifying out of tech. I have a lot of public tech stocks into credit. It strikes me that for the first time in a long time, you're being paid to be in credit. And I have some friends in the distressed credit business. And you can get kind of unlevered 12 to 15% returns.

And I'm in a position in my life where I want to de-risk. And I think one way of doing that, I mean, I'm very invested in tech through a lot of my private investments. So I'm thinking of transitioning out of many of my tech holdings into credit instruments. Let's move on to the next prediction. TikTok comes for Netflix and Spotify. I think the implication is pretty clear there, but how do you see TikTok's ascent playing out in the traditional media ecosystem? TikTok just continues to garner more and more mindshare, more and more people's time. And I don't know if you remember those charts that showed that people were still, like newspapers were getting 15% of all ad dollars, despite the fact they were only getting 6% of people's time.

Eventually, money matches time spent or eyeballs. And every year, every day, TikTok is garnering more and more time of the most valuable consumer in the world. And that is a young male who buys stupid high margin products. And the data I saw that was really compelling was that Netflix consumption has actually leveled out for not only kids, but also for adults while YouTube and TikTok continue to go up. In addition, I think that TikTok offers something so singular and so powerful that we miss it. And that is it's one channel. There's no choice. It uses the signal liquidity of all the different actions you provide to the algorithm, the AI-driven algorithm of what you're enjoying or not enjoying, and it begins to calibrate in on content that is just extraordinary. And why do you need 400 channels? You don't. You only need one as long as it's the right channel and it knows exactly what

you want. Consumers spend something like 50 minutes a week deciding what to watch on Netflix. So how much would someone have to pay you to say, all right, this week, you're not taking a vacation. You're sitting in your living room and you're deciding what you're gonna watch for the rest of the year on Netflix. We wake up Monday at 9 a.m. and until 5 p.m.,

you do nothing but decide and plan out what you're gonna watch on Netflix for the rest of the year. And then Tuesday, you do nothing but decide and plan out what you're going to watch on Netflix for the rest of the year. And then Tuesday, you do the same thing, Wednesday, Thursday, Friday. That is the tax that choice places on you. And even though Netflix has an outstanding recommendation engine, it's dwarfed by the recommendation that is one channel called TikTok. Side question from Laith. Iith? I hope I pronounced that correctly. Apologies if I didn't. What do you think of Netflix moving into sports?

It strikes me that, I don't want to say it doesn't make sense, but the reason why sports captures so much revenue and such extraordinary rights fees is because it's one of the few media vehicles that people still want to watch live, meaning it's some of the few media vehicles that people still want to watch live, meaning it's some of the few media vehicles that people will endure advertising. It's the same reason Netflix isn't in news, and that is news and sports have a perishability about them, and

Netflix is in the business of non-perishable content. I'm watching Squid Games. I think that's two or three years old, but it doesn't matter, and they have it all, and it's all queued up and ready to go, and I can binge watch it. Whereas when you watch CNN, you don't want to watch day-old CNN, and that's part of the reason it's powerful, because you're willing to watch it live. You want to hear Fareed's take. And so you're willing to watch a commercial telling you you have opioid-induced constipation or restless legs. We'll be right back. We're back with ProfitG Markets. So I'm just going to move us to the next one,

which is Peak AI. You say we've reached Peak AI. And by the way, last year, you said that AI would be tech of the year, which counting that prediction is correct. You also said open AI's valuation is going to come down and that the, quote, empires will strike back. What did you mean by that?

I don't think we've hit peak AI in terms of its impact on business and the economy. I think we've hit peak open AI valuation. I don't think that valuation won't maintain its velocity. I think $90 billion and the valuation that the whole Magnificent 7 that's been AI-driven has kind of been fully incorporated. I think OpenAI is an amazing company, but I think at $90 billion, a lot of that kind of amazingness, if you will, has been factored into that price. Now, it might in in fact, do really well in 2025, but I feel like, I don't want to say it's gotten ahead of itself, but it is definitely,

that is a forward-looking valuation. There's a lot of promise built into that valuation that I think it'll recognize. I just don't think the performance can live up to the promise in 2024. So I think that a lot of those stocks, NVIDIA, Microsoft, OpenAI, that have largely been run up based on kind of the AI hype, I think the hype, if you will, is going to continue, but I don't think they're going to maintain those sort of gains in 2024. Who's the empire striking back then? I think it's Alphabet, and that's my big tech stock pick. I think Gemini and its access to proprietary data, including your Gmail account, YouTube, your calendar, I think it's going to give them a leg up and have all sorts of really interesting

applications that'll get people excited again about Alphabet. Also, on a relative valuation basis, it looks reasonable compared to the other guys. Is there anything else beyond AI that makes you optimistic and bullish on Alphabet? I think one thing you mentioned may have been YouTube. Yeah, YouTube is effectively the fastest growing media platform outside of TikTok. And that is YouTube and TikTok are taking share basically from everybody else. And YouTube is now bigger than any cable channel. It's growing double digits. It attracts that kind of elusive great white rhino, and that is young men. And they're getting into TV, and the user reviews are great on it. It just strikes me that YouTube is sort of the big engine that could and continues to take share from the cable guys. Its ad model is outstanding. The ads, to me, there aren't quite as offensive because of that whole five-second you can skip ads. I think that Alphabet still has the largest toll booth in the world in the form of search, has growth vehicles in terms of YouTube, and I think that it's about to recognize that AI-inspired bump party that they were sort of left out of. Even though the stock's up, I think, about 33% or 35%

this year. So it hasn't underperformed the market. It's overperformed, but I don't think it's had the same kind of champagne and cocaine updraft that everyone else has had. And I think it's going to register that in 2024. Okay, next one, tech of the year, GLP-1s, i.e. weight loss drugs. Take us through that. I think this is going to have all sorts of impact. And the diabetes or the obesity economy is $1.7 trillion. It's, I mean, what is that? That's like 8% of the economy. And if you look at McDonald's, PepsiCo, General Foods, if you look at Coca-Cola, they're literally obesity indices. As obesity has gone from 30% to 40%, as morbid obesity has gone from 5% to 10% in the last 10 years, these companies' stocks are up 7%, 10%, 20-fold. And when you see a decline in obesity and morbid obesity, I think you're going to see

the same type of deceleration in these stock prices. I don't think we've even scratched the surface in terms of companies that are, you know, kidney dialysis companies, medical equipment manufacturers, you know, companies that produce all those motorized vehicles for people who have become too obese to get from Tomorrowland to Fantasyland to Disneyland. I think it's just going to be enormous and there's going to be all sorts of benefits and weirdness and we're going to see from these drugs. Tech of the year, GLP-1 drugs. Comment from Andres, quote, I don't buy this prediction. Scott isn't considering access to GLP-1s. getting to the obese. It's getting to ladies of lunch who want to lose that last 10 or 15 pounds. Having said that, and that's who I know is on GOP1, is basically rich housewives and fat dudes are my friends who are wealthy and just very overweight. Guys who are very overweight and

women who are modestly overweight that have money. That's who I see using it. Maybe that's just the people I hang out with. But anyways- I was going to say, I think those are the only people you know. Probably true. But I do think there is so much money in R&D. I do think the market's going to do its job here. And there will be all sorts of innovation and specifically lower-priced drugs that do start to permeate or melt into the region's neighborhoods and demographics that could most benefit from this. I also think the government's going to get involved and start probably saying this qualifies for Medicare, Medicaid, or what have you. So it'll take a while. It's definitely not getting to the right people now, but I think it will eventually. Let's hear it for the ladies who watch. Everybody Next prediction, India is the new China. What does that mean? Yes. In addition, it's growing off of a smaller base. And all the things we said about India 30 years ago still hold true. It's a democracy, more English speakers than any other nation in the world, I think, more PhDs. And it's kind of a swing vote in terms of where it is geographically. I think India is, I think just as people were looking to China for, you know,

incredible manufacturing might and to invest there because of an emerging middle class, I think that the same excitement and the same dynamics are forming in India. And I think America is going to say, and a lot of Western nations are going to say, it's not probably a bad idea to diversify away from china and make some big bets in india so i think all the moons are lining up for india are you going to try to expose yourself to any indian stocks and take part in that ascent or i'm going to resist uh the answer to the question you're going to try and expose yourself so the that's just too easy that's just too easy yeah um anyways uh am i going to try and expose myself

to india i i haven't so far what i do want to do i want to go to india i have a lot of my closest friends are see i'm not a racist some of my closest friends are indian um uh yeah you know i'm being very honest like my closest friends at stern are indian and i've always wanted to go there. I'm interested in the culture. I've always been a little bit intimidated by it, but it's definitely the one country, the biggest, most important nation that I haven't been to. So I don't know if I'm going to invest, but I'm definitely going to make a couple trips down there in 2024 and Israel normalize relations, and then also U.S. and China relations thaw. Let's start with Saudi Arabia. What do you think is going to happen there? I think the kingdom is making reforms at a faster pace than any nation in the world. And granted, that's from a bad place. But every three to six months, MBS rolls out new reforms, whether it's, and this sounds incredibly primitive, but women being able to travel without the permission of their male guardian or women being able to drive or alcohol, whatever it is, they are reforming faster than any nation in the world.

And the other kind of anecdotal observation I would make was when I was in Mykonos, I noticed that at all the clubs, all the tables were filled by kids from the Gulf. I think they are pivoting towards capitalism. And the other large economy in the Mideast is Israel. They need tech. Israel needs capital. It seems to me like a marriage made in heaven. And I think that, if you will, MBS is trying to pull off the ultimate pivot away from fossil fuels, but also a pivot away from extremism and fundamentalism to capitalism.

And it strikes me then these talks and this kind of thawing or whatever you want to call it as well underway, the conflict in the Middle East has put that off. It may not happen next year, but I think it'll definitely happen in 2025. And also, if you look at the kingdom ed, they've been remarkably quiet. They haven't been shitposting Israel or putting out a lot of statements of outrage or indignance about the bombing in Gaza. It just says to me that they're like, okay, they set us back, we got to wait, and that'll be the ultimate Iron Dome for Israel. So I'm actually quite excited about the prospect of the kingdom and Israel normalizing relations. I think it makes sense for both of them. And I think it'll be good for peace in the Middle East and good for the world.

And then with respect to China and the U.S. Sorry, before we move on to China, I just want to interject with a comment from Jeffrey. He says, quote, I wish Scott was as critical of Saudi Arabia as he is of Elon Musk. What's your response to that? Well, I wish I had a bigger dick and a lot more money. I wish for a lot of things, Ed. I think I call it as I see it in the kingdom. I think the kingdom,

I think the kingdom, if the West wanted to write a script for how it wanted the kingdom to behave, a pivot to capitalism, reforms, buying a shit ton of products, you know, it just strikes me that the kingdom is kind of coming to us. And so, I mean, keep in mind, the kingdom used to spend all of its money on funding a cold war with Iran and a hot war in Yemen. And instead now it's spending its money and trying to pivot away from fossil fuels to education, manufacturing, a remarkable innovator. I think he's great at what he does. And I also think it's a Jew-baiting absentee father. And I just call it as I see it. And I'd like to think I call it as I see it in the kingdom. But from an American interest standpoint,

I think the kingdom's move and MBS as a reformer is arguably one of the best things to happen for the West. If the world is becoming bipolar, that is China and Russia versus the U.S. and Europe, the two key swing votes, just as less than 100,000 suburban moms are going to decide who the next president is. Do you realize a bunch of moms in the suburbs of Akron, Ohio are going to decide the war in Ukraine? Basically, they're going to decide who wins. Because whoever wins president, if Biden wins president, Ukraine probably wins the war in Ukraine, basically they're going to decide who wins. Because whoever wins president,

if Biden wins president, Ukraine probably wins the war, or at least it's at an extended stalemate. If Trump is reelected, Putin is one. And the soccer mom or the suburban mom in Akron, Ohio is India and the kingdom, to a lesser extent Indonesia and Turkey. But effectively, for our own self-interest, just being very selfish about American interests, I think that we want to embrace India and the kingdom. And with respect to Elon, I just think he couldn't be a shittier role model for young men. I think what Jeffrey would probably respond to your comment there is like, you know, your point is the soccer moms decide in this case saudi

arabia is the soccer mom and so we gotta we gotta play ball with them but if a soccer mom chopped up a u.s journalist with a bone saw do we still kowtow to the soccer mom because they're influential and because they're going to decide the fate of the country. And I think that this is where the criticism lands is, where is your line here in terms of, yes, we need to accomplish our own geopolitical goals. And it's true that being friends with the rich guy is a good thing. But, you know, do we need to sacrifice something or do we decide that Saudi Arabia, their human rights violations haven't been bad enough to cut ties?

So let's be clear. They murdered Jamal Khashoggi. They murdered a U.S. resident who was a journalist for the Washington Post. The question is, all right, so do we not do business with them any longer? Is that it? Because if that's the bar, we're not going to be doing business with the majority of nations around the world for a long time. And to be clear, your bar with Elon Musk, you don't want to do business with him. You don't want to be on Twitter. I mean, Elon has crossed some line for you, which is, I don't think he's ever killed anyone with a pencil.

The analogy really doesn't hold there. I think America should continue to do business't hold there. I think America should continue to do business with Elon Musk. I think they should continue to buy his products. I think they should continue to produce great graduates for his companies. I think they should continue to host him and provide him with the same rights as any other citizen. I don't have to buy his car or be on his platform as a consumer. It's pretty simple. And when you're talking about nation states and geopolitics, yeah, I think it's easy to be a purist. So the question is, do we not do business with the kingdom moving forward because they murdered a U.S. resident

journalist? And if some people decide that's it, that's their red line, I get it. More power to you. I think the long-term interests of the United States, I mean, for God's sakes, we went into Iraq under false pretense and killed 420,000 people. But because it's 420,000 people and we don't know any of their names, it's like what is it Stalin said? One death is a tragedy. Hundreds of thousands of deaths are a statistic. So I am very focused on the well-being and the prosperity of the U.S. And I think that that prosperity is best served by one, continuing to do business with Elon Musk and creating an environment where geniuses like him, and he is a genius, continue to innovate, and that he has the opportunity to become the wealthiest man in the world and party in St. Barts and then fly around

on a 650 and cosplay being a statesman and then come back and go to Burning Man and do ketamine, more power to him. I think we also continue to do business with India and the kingdom because I want Americans to have more access to universities, a bigger Navy, more access to capital to grow their companies, and more tax revenues for child tax credit, for our parks. I want America to win. And the way we win is by having a certain amount of rail politic, and that is recognizing it's a big, bad fucking world out there, and we have to make hard decisions. And I don't even think this one is a hard one. We absolutely bear hug India and the kingdom. We'll be right back. We're back with Prof G Markets. Next prediction,

Musk loses control of Twitter or he sells it. Yeah, I just think at some point this shit show that is Twitter jumps the shark and starts infecting his other assets. And he's going to make so much money off of SpaceX,

which is an amazing product, specifically Starlink. And also's going to make so much money off of SpaceX, which is an amazing product, specifically Starlink. And also Tesla was the golden goose. His new golden goose is going to be Starlink. And at some point when he continues to do these crazy things like platform Alex Jones, it's just going to come back to haunt him. I mean, he's basically just recently insulted, you know, basically said, fuck you to Bob Iger. I don't see how that helps him. Literally said it. If somebody's going to try to blackmail me with advertising, blackmail me with money, go f*** yourself.

But go f*** yourself. Is that clear? I hope it is. Hey, Bob. I don't see how an advertising-based platform that has registered the greatest decline in revenues of any company over a billion dollars has creditors he owes $13 billion to who don't know when to sell this thing because he keeps doing these insane things that take the revenue of the company down, thereby creating risk he's not going to be able to make those interest payments. He's literally about to cost blow the quarter for Morgan Stanley, Barclays, and I forget who the third one is, B of A, when they have to recognize these losses

because the man-child can't keep his fucking mouth shut and nobody wants to advertise on his platform. In addition, I wonder when Apple kicks him out of the app store for violations of their terms of service, because at some point the hate speech is so out of control on the platform that they say, okay, you're no longer in the app store. And then what happens to the company? That's what they did with InfoWars. Alex Jones's app got pulled from the app store because it violated their policies. Also, the guy just has so much opportunity at his other companies. I think at some point he might decide, you know, one, he's very levered and he might decide, okay, I don't want to make the interest payments and play chicken with the banks.

I think there's a chance he loses there and somebody else comes in and buys the debt and bumps him out and bumps him into bankruptcy. I think that if he gets kicked out of the app store, I think at some point he might decide he's had enough. Well, say he folds tent and the company goes under and it's declared a loss. He will say that advertisers killed the company or it will be seen as he killed the company because he's irresponsible. How would history remember that event if X went down? Advertisers, people have the right to spend money, people and corporations, where they want. And if someone says to you at a meeting, fuck you, you're under no obligation to continue advertising on their platform as a matter of fact

if you want me to advertise on your platform i want you to invite me to your big beach party and can and kiss my fucking ass and that's what they do in order to maybe get some of your ad budget and and somehow his fans have decided that companies have an obligation to kiss his ass and advertise on his platform when their ad might end up next to a swastika. I mean, I know I'm going to take my car to get washed at a place where all the workers throw their rags at me and flip me off and say, you're an idiot. And then if I threaten not to get my car washed at there, they'll say, you took down this car wash. I mean, I realize that's a bad analogy, but anyway, that to me seems literally insane that now advertisers are no longer part of a free capitalist economy. And that when they decide not to advertise on a platform, they're the bad guys. Let's move on to our next prediction.

Meta's next growth vehicle will be WhatsApp. What potential do you see in WhatsApp? WhatsApp is a phenomenon. They're finally starting to learn how to monetize it. I'm struck by how many people are on WhatsApp. I find myself spending more time on WhatsApp. And to Meta's credit, I mean,, Instagram was the growth story that kept on giving. You know, the core platform, Facebook, was their cash cow. Instagram was their growth vehicle. And now they have a second growth vehicle in WhatsApp that I think they will start really turning on the monetization jets in 2024. And arguably, it's the largest telco globally.

So what would the five largest telcos be worth if you added them all up? And the answer is a lot more than Meta is right now. So I think WhatsApp is kind of, I don't wanna say overlooked, but that's the new growth vehicle for Meta. U.S. inflation drops to Fed's target of 2.5%. I think it might even go lower.

I see AI as deflationary. Danny Blanchflower, who we were talking about in the last episode, economist from Dartmouth, said there isn't a modern economy that hasn't been able to tame inflation because inflation is sort of a self-correcting mechanism where prices go up, dampens demand, it comes down.

And I just think AI is going to be everywhere and, per our previous comments, make companies more efficient, more productive. And it'll be so ubiquitous that those cost savings will be passed on to the client or the customer, which will ultimately be deflationary. I also think that the stickiest part of inflation, wages, will have a psychological dampening effect because I think lawyers, everyone from lawyers to consultants, I think people are just going to be less confident asking for big raises when they see how their company is using

AI and do the math and go, they're going to need less of us next year. So I think that we're going to see inflation come below the target next year. And we've got one last prediction, which is a fun one, political prediction. Biden is reelected and Trump is sentenced. Yeah, look, it'd be very unusual. I've said this publicly. I wish another Democrat was running. I just think it's insane. And we're trying to suspend disbelief in the natural order

by electing someone who's going to be 86 the last time he leaves the West Lawn and Marine One. I think it's ridiculous. Having said that, he surrounds himself with smart people. He's a principled person and he's not a criminal, which draws sharp relief between him and President Trump. And the poll done amongst Republicans found that 7% of the people who are planning to vote for him would not vote for him if he was, in fact, convicted. And you think your first reaction, or at least mine, was, wow, he has such a hardened base. But that 7% loss would be more than enough to ensure that he doesn't win the presidency. And I think when faced with this, revisiting this national nightmare that is Donald Trump,

and I know a lot of people are angry. A lot of people like his brand. But I don't see how a president during good economic times, an incumbent president loses. And I don't, I just don't see how the odds lead anywhere. But some sort of prison sentence, I just don't think America is going to send someone in an orange suit to the White House. Just a personal question for me. Do you have a favorite GOP candidate aside from Trump? And if so, would you ever vote for that candidate over Biden? I'm a big fan of Governor Haley's. I would like to see, I mean, it's identity politics, but I just think it's strange that what I would argue the most progressive multicultural democracy

in the world still has not had a female president. I would enjoy seeing a female president. I think she's very qualified, foreign policy experience. I think she's a good person. I think she has really shown her mettle on the debate stage. I think she'd be a good president. Anyone who isn't for reproductive rights, and she's tried to kind of pull back from the issue and say it's up to the states. I hate when Republicans do that. It's not up to the states when it comes to guns. But anyways, that for me is kind of a deal killer. It would just be very difficult for me to vote for someone who in any fashion is not going to fight for a woman's reproductive rights. I feel like we're

taking women back to old Spain. I think it's an affront to decency. And for me, I don't want to say I've become a one-issue voter, but I would have a difficult time voting for anyone who constantly talks about how pro-life they are. And she's the least crazy of them. But if Biden is the nominee, I will canvas for him. I will give some money and I will do my part as a citizen to probably re-register to vote in Nevada or Michigan or something. We're moving to Detroit, Ed. Team Biden all the way. Team Biden. Yeah. You and I will share a CPAP, maybe buy catheters together. Let's move on before anyone has to picture that. We're now going to shift it to our listener predictions. We asked for your predictions

at the end of last year, and you all delivered. My prediction revolves around the 2024 US presidential election. In recent history, the largest third party result was by Ross Perot in 1992. He got close to 19% of the vote. I predict that in this upcoming election in 2024, a third party will garner at least 19% and probably surpass that, which would be a first in a long, long time. My prediction is not a fun one, as I believe that in 2024, we will witness the testing of an above-ground nuclear bomb. I think there's three scenarios that could spark its return. Number one, Russia could launch one to deter NATO and bring the war in Ukraine to a close with new borders. Number two, Israel could launch one to declare itself as a nuclear power in the face of Iran and its proxies, Hezbollah,

Hamas, and the Houthis. Number three, China could try intimidating Taiwan into peaceful assimilation knowing that a D-Day style invasion would be catastrophic. I say this as we enter the year that we will celebrate the 80th anniversary of D-Day. Are we doomed to forget the lessons of that war, especially as so many of the heroic voices from that generation leave us? Or did I just watch Oppenheimer one too many times this summer. My prediction for 2024 is that the EU electorate has lurched to the right and it's not being picked up in polls, really. But I think it's going to be when voters walk into the voting booth for the EU parliamentary elections coming up this summer, I think that they're going to be pulling the lever for the candidates on the right side.

In 2024, everyone looking ahead is predicting a kind of immaculate soft landing where inflation cools, but there's no recession. And I think that's misleading and it's wrong. I think there will be a recession. My prediction is that in 2024, Scott is going to stop his glory hunting switching of premiership teams and discover the delights of lower league football. I predict he's going to head south of the river. He's going to go to Charlton, Millwall or Wimbledon, where the football is mediocre, the atmosphere is fun and his bad taste in jokes will be welcomed for the terrorist chants.

I predict that Ed Elson will replace Professor Galloway on the Prof G pod and it will become the Prof E pod. Thanks for sending in your predictions. We want to keep the conversation going, so don't forget you can reach out to our producers with questions or comments at officehoursatprofgmedia.com or you can leave a comment on our YouTube channel, The Prof G Show. This episode was produced by Claire Miller and engineered by Benjamin Spencer.

Our executive producers are Jason Stavis and Catherine Dillon. Mia Silverio is our research lead and Drew Burrows is our technical director. Thank you for listening to Prof G Markets from the Vox Media Podcast Network. Join us on Wednesday for office hours, and we'll be back with a fresh take on markets every Monday. Reunion As the world turns And the dove flies In love, love, love, love