The Prof G Pod with Scott Galloway - Prof G Markets: Epic Defeats Google, Ohtani’s Dodgers Contract, and Argentina Devalues the Peso

Episode Date: December 18, 2023

Scott shares his thoughts on why Google lost Epic’s lawsuit, while Apple was able to win in a similar case. He then discusses what it means to devalue a currency, and whether or not Argentina can turn its economy around. Finally, he breaks down the largest sports contract in history, and explains what working professionals can learn from it when it comes time to negotiate compensation.  Have a prediction for 2024? Send us a voice recording at [e-mail] Learn more about your ad choices. Visit podcastchoices.com/adchoices

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NMLS 1617539. This week's number, 1,500. That's how many items have been stolen from the British Museum in recent years. Things being stolen from the British Museum. That's ironic. Welcome to Prop G Market. So you get it there? That's what you call intellectual humor, Ed. Did something stolen from the British Museum? By the way, I was there with my boys, and they said, can we take pictures?

And I'm like, no, you got to leave them on the wall. Little dad humor. Little dad humor. Today we're discussing Epic Games, the Argentine peso, Argentina Buenos Aires. I've been to Buenos Aires, Ed. I don't think you have. I'm much older and much more refined than you. And the largest contract in sports history here with the news is Prop G media analyst Ed Elson. Ed, what is the good word? Doing pretty well, Scott.

I was in Canada this weekend in a skiing race, which was pretty fun. What? Yeah. Say more. You ski? Kind of. not really. Me and my friends, we signed up for this thing called the 24-hour Tremblant, which is basically 300 teams, and you start at the bottom of the mountain at midday on a Saturday, and

you have 24 hours to go up and down the mountain as many times as possible. So there were 10 of us on our team. We split it around. Wait, a chairlift or hiking up the mountain? Chairlift. Oh, who cares? Okay. Yeah. That is not formidable if you were actually hiking. Okay, here's the formidable

part, which is you got to go between 2 and 6 in the morning. So I thought that was pretty impressive of us. And we split it up into two-hour shifts. And I was the final shift. I got a good slot. But we came 13th out of 300 teams.

Wow, that's very impressive. So I'm feeling pretty good about myself. That's very impressive. You're such a sexy beast. You got a tremble and you ski up and down a mountain. Yeah. Oh, my God. I'm just trying to be more like you.

Yeah, that's the key. What about you? What did you do this weekend? Nothing that cool. What did we do? We did my favorite thing. We went to the Harrods Food Court, ranked as the fourth best food court in the world.

That is my son's new favorite restaurant. Love that. But we did that, and then we watched the Tottenham Spurs game, and then- Christmas shopping? No, I don't do that. I have an assistant.

Anything you get from me, you should know has nothing to do with any sort of goodwill from me. I will keep that in mind. Yeah, yeah. By the way, I don't give gifts. I give money. That's what everybody wants.

What everybody wants this season, money. What do your kids want? I don't know. That's up to their mom and one of the several nannies that we outsource all parenting to. You couldn't even hazard a guess at what they want? Well, okay. So my, okay.

I'm giving my 16-year-old driving lessons. I know that's a really cool gift, but he's dying to learn how to drive. So we're going to Florida. That's really nice. I signed him up for like a crazy amount of driving lessons because the few driving lessons I gave him put a serious strain on our relationship, Ed. As my son is a, once he gets behind a a wheel it's not one with the car and i'm also very nervous in the passenger seat so it's just not a good not a good combo so i'm outsourcing it to some nice lady it's a lot more holes in the money my youngest is very kind of he's a little

bit not a little bit he's a lot of a terrorist he's awful but he's very emotional and very like sentimental and so i got has both necklaces from the same stone and he likes that kind of stuff he likes that kind of thing that's nice getting the nice honest view of scott this episode i like it there you go anyways get on with the news start with our weekly review of The S&P 500 had its best day in a month. The dollar fell. Bitcoin was volatile. And the yield on 10-year treasuries dropped below 4% for the first time since August. Shifting to the headlines.

The Consumer Price Index showed inflation cooled to 3.1% in November, down from 3.2% the month before. The Federal Reserve held interest rates steady and signaled three rate cuts in 2024. The Dow hit a new high after that decision, surpassing 37,000 for the first time. Macy's stock rose more than 20% after an investor group proposed a $5.8 billion buyout to take the company private. The retailer's real estate appears to be the true target. Its properties are estimated to be worth to take the company private. The retailer's real estate appears to be the true target. Its properties are estimated to be worth more than the company's market cap.

Pfizer shares dropped 9% after the drugmaker's forecast for revenue and profit came in below expectations. The company is anticipating decreased demand for its COVID products in 2024. And finally, OpenAI and Axel Springer struck a deal to make news accessible through ChatGPT. The chatbot will use Axel Springer's publications, such as Business Insider and Politico, to deliver new summaries with links and attribution to the original article. Scott, thoughts? Danny Blanchflower, the economist in Dartmouth, said something that really struck me. He said, since World War II, no modern economy has ever had enduring inflation because if you have a modern economy and you have responsible Federal Reserve, effectively, inflation is a self-correcting mechanism. And that is inflation takes prices way up, which dampens demand, which brings prices down. And that's kind of appears to be what's happening here. And then you have the tailwinds of decreasing energy costs. And I think technology, which continues to further and further

permeate every organization, is just deflationary. You can just do more with less. I mean, here at Prof G, we're talking about our 2024 plans, and we're talking about growing our revenues 20% to 30%. And we're not going to hire very many new people. And a lot of what we're talking about, you know, is synergy. And plus, you know, the guy who runs the company is a total asshole. But we are trying to figure out ways to leverage technology and what have you to, including AI, to make us more efficient such that we can maintain our pace of revenue growth. But the whole point is increase revenues at a greater pace and you increase your costs and your profits go up. So I think it's been a lot of things, but I would argue

that Time's Person of the Year should have been Chairman Powell. I think he is, I mean, Jesus Christ, what do Americans want from the economy? It's the fastest growing economy, a large economy in the world right now with the lowest inflation. I mean, how do you even do that? That makes no sense to me economically. I was looking back at some of the headlines from a year ago. Let me just read some of these to you. Bloomberg, US recession this year, more likely than not. Forecast for U.S. recession within year hits 100%. 100%. Every economist they surveyed said there was going to be a recession. Now, here we are year to date.

Dow Jones up 12%, S&P up 23%, NASDAQ up 42%, unemployment rate 3.9%, and inflation's down to 3.1%. So I think Jerome Powell should go down in history as one of the greatest policymakers of all time. Huge win for Jerome Powell. Yeah. So it sounds like you're going to start making bracelets that say you're a Powley or a Jeromey or whatever it is. Yeah, that's right. That's right. Yeah. He's definitely going to go down in economic history. All the dorks in business school are going to be talking about Jerome Powell. The market is essentially a vehicle for discounting cash flows and it also attempting to estimate future cash flows. It's constantly trying, it can't look around the

corner, but it tries to sense or hear what is going to happen around the corner. And what it hears is rate cuts. It believes there's going to be three rate cuts and then boom, projects make new sense, more people spending, more people borrowing. And again, the market is a forward looking prediction machine and it's predicting that the punch bowl is coming back. So we've seen new highs. I think Apple touched a new high. Macy's, I kind of wish Macy's would just go away. I'm sick of talking about it. And here's the thing. All of these activists have been threatening to take over Macy's for 20 years because their whole thing is the core business is okay, but the markets hate it. And what you have with Macy's is that they purchased all of this high-end real estate through the 70s, 80s,

and 90s, and that that underlying real estate, because of the real estate boom, is worth more than the company. Okay. But that's like saying, Ed, your kidney is worth a quarter of a million dollars, and a quarter of a million dollars is worth more than anything Ed Ellison does right now. But we have to go in and get the kidney. That's the hard part. And that was weird. Crazy. I actually like it,. It's actually, it's kind of, but just because here's the thing, whoever I, to go in and get the kidney for me, Macy's to go in, take control of this company, start shutting down stores and sell the underlying real estate. You know, every, that is not an original idea.

Let me bring up one of your wrong predictions from a long time ago that you got a lot of shit for, sort of been memes to no end. But in 2015, your prediction was that Macy's will be the most successful retailer of the next five years, not Amazon. So at the time, Macy's was around $22 billion market cap. It's now being sold for around $6 billion. I'd like to get your official take here on this pod. What would you say to your 2015 self who made that prediction? What did you get wrong or right? Well, if I could speak to my 2015-year-old self, I would be like, take prostate-shrinking supplements and buy NVIDIA and Netflix. But see, I don't get to do that, Ed, nor do you. And you're referencing a speech I gave at DLD. And my point was Macy's

had just started an e-commerce site. And the point I was trying to make was that multi-channel retail was the future. And at that point, Amazon didn't have stores. I don't remember making a call on the stock. What I remember saying was would the future look more like Macy's than it looked like Amazon? And that is the future looked like multi-channel retail. And just a quick reality check, I have never owned Macy's stock. My largest holding is Apple, and my second largest holding is Amazon. So I get a lot of shit for that. But what the larger point I was trying to make was the future was about multi-channel retail. Pfizer, yeah, look, it's, you know, the pandemic was great for pharmaceutical stocks that were in the business of vaccines. I think it makes sense. I don't know what to say there other than I hope their stock continues to go down. I don't miss the pandemic. I've had a fairly serious cough and it was really interesting. For the first time, I'm like, I need to take a COVID test. And for the first time, I did not have COVID tests in the house. I usually have like eight

of them everywhere. I used to test all the time. And I remember thinking, I don't think I have it because I'm too sick. And especially a lot of people who get it now aren't getting as sick. But, God, that just feels like a dream at this point, doesn't it? And let me say out loud what no one wants to say, especially if you lost people. Those two years were likely the best two years of my life in that I got to— the pandemic for me was time at home with kids, no traveling, Netflix, and my stock skyrocketed. We basically figured out a way through government programs to make sure that people that already had money, already had homes, already had stocks, and already were in relationships, that their life got better. And we did that by juicing it

with $7 trillion on our kids and our grandkids and our credit cards. I think our government's response to COVID was morally corrupt. But the best two years of your life. A hundred percent. Okay. I've been on the road 180 days a year, and then all of a sudden I'm at home and I can go boogie boarding with my sons after school. And oh, but wait, what happened to your portfolio? It's a global pandemic. Oh, it's doubled. I mean, and then the majority of America has to put their diabetes medication and Diet Cokes in a cooler and head out with their fucking Uber app and get COVID. Our economy has decided to spend other people's money to shield the most fortunate from anything bad happening from them. The biggest big story this week was this story about Axel Springer and OpenAI, and that is,

my belief is that the actual LLMs will not be that differentiated, that AI itself will ensure that the underlying technology, no one ever gets that much advantage. But what this does is, it's a watershed moment because it acknowledges their ability to crawl this data has value. That sets a really healthy precedent. And I think you're probably going to see companies like the New York Times company and maybe even Gannett and some of the newspapers at Hearst. I think you're going to see traditional media stocks go up in value because I do think that

the level of misinformation and disinformation has reached a boiling point and people are going to, and this might be just me projecting and being a boomer aspirational, but I do think people are going to say that the newsroom of the Washington Post and the New York Times and the investment they make in fact-checking does have a renewed sense of value. And whoever has access to that, whatever generative AI has access to that, it's going to be worth a lot to them. We'll be right back with Markets. Epic Games won its three-year-long antitrust case against Google. The unanimous jury found that Google's App Store policies violated antitrust laws and maintained a monopoly. The result is a stark contrast to Epic's similar suit against Apple, which it lost in 2021. Scott, what do you make of these differing outcomes for Epic?

I think this is big. This is a perfect example of monopoly abuse. It'd be like, you fly Delta. Say Delta was, there were only two airlines going to Europe, and you wanted to go home to visit your mother and your family and, I don't know, do some crazy like nighttime ketamine inspired athletic competition. And there were only two airlines. You could either fly Delta or KLM in the same network, both fairly mediocre airlines. Delta has an okay domestic product, but international shit. And if you flew one of the two airlines while you're over there, you had to use their credit card. And the fee wasn't 2%, it was 30%. That is effectively, we've gotten used to it, but the fact that you can, or the idea that you can download Fortnite in the App Store, and then anything after you've downloaded that you buy in the app, whether it's skins or additional unlocking different games or whatever it is, unlocking different characters.

Do you have to pay a 30% tax to Apple? Barry Diller had this right. They provide underlying technology, security, safety, protection from cyber attacks, a uniform, scalable kind of utility like processing. All of that is what the app stores do. They deserve something. The credit card companies charge between one and a half and 3%. These guys charge 30. So this is big. It'll give judges the confidence to have more rulings against these guys. What was interesting was this was a jury trial. The fact that the Google attorneys allowed for a jury trial was just stupid. And it represents that I think the kind of the public complexion against big tech has shifted somewhat and there's i think it's ultimately the release or relief from what is one of the most onerous unfair taxes on the entire ecosystem that is the apple uh the app store and the google play app store so i think this is huge

and i think it's important and i think it was the right decision what are your thoughts ed you mentioned the jury trial that google opted to have a jury trial. They then went back on that decision. They said, actually, we want to go for a bench trial, which the judge denied. And in addition, there were all of these internal communications that Google basically deleted and tried to get rid of this paper trail, which was then brought to the attention of the judge. One thing that Tim Sweeney said, who's the CEO of Epic Games, he said, the big difference between Apple and Google is Apple didn't write anything down.

So when you look at this, what does this tell us about Google and how Google runs its company compared to Apple? That it's poorly managed. It's obvious that Apple has basically orientation that feels like a re-education camp that says, okay, you don't ever say anything negative about a competitor. Anything as it relates to a competitor, you don't write down. I mean, essentially, Apple's run like a Panzer tank division. There just isn't a lot of room for error. And it seems like Google is a plaintiff's attorney's dream.

Have you noticed there aren't a lot of like Apple influencers saying, hey, this is my day at Apple. I'm here at the cafeteria and check out how cute my outfit is from Cupertino. Hey, everybody, want a spin of the Apple spaceship? And they're like, okay, that's really fucking adorable. Here's this really well-designed, elegant, user-friendly severance letter. And it's clear that they manage all communications, all touch points really tightly. Whereas Google is much more, hey, Sergey and Larry are coming by. Let's all go to Burning Man. That really might be the difference between these two decisions is the way these employees handle themselves and their communications. In some, loose lips sink ships.

In this case, loose lips sink your app store. Final note, I mean, you're an investor in Epic. Just at a general level, do you have any thoughts on the gaming industry over the next few years? Are you, I assume as an investor, you're very happy about this decision? Yeah, but it's strange. You think, oh, Epic, I've done really well. I invested, I think at the beginning or right before COVID, I invested $5 million in a secondary from Epic. Some enterprising Stern student found shares on the open market from Epic employees, bought a bunch of them and then parsed it out. And it's taking, I think, 10% of the upside and put it into an LLC or some sort of SPV structure. I invested, and I think I

invested at a valuation of 22 or 23 billion. And I don't think I've made any money. I think the company, I mean, this was when all the stocks were riding really high and people thought Epic was going to go public that year. I would bet that I'm sort of even on that investment. It's an amazing company. It has Fortnite. It has the Unreal Engine, which is the underlying sort of, I don't know, tool or operating system for how a lot of gaming companies build games. It's a really well-managed company. They just laid off a bunch of people, which I like, quote unquote, year of efficiencies. This could do nothing but help in terms of offering them additional incremental, very high margin revenue. So I'm hopeful. And I wanted exposure to the video gaming space. It's such a huge industry. It's growing. I see the level, the grip it has on my

kids. I also don't actually mind it as much. They play with their friends. I mean, even now, I get a huge kick. My kid, when he plays Fortnite, he'll yell out this battle cry. He'll go, yeah! And it just, it makes me happy. That's awesome. Yeah. It's just when he kills, you know, when he kills a friend of his or something. But they play together. What I like about it is his friends come over and play with him. And also the research shows that there isn't a correlation between depression and video game usage. There is a correlation between social media usage and depression, but not between video game usage and depression. So I'm actually kind of a fan of video games. I wanted exposure

to the space. Did you play video games, Ed, three years ago when you were 11? Oh, yeah, 100%. 100%. Same thing. Got online with all my mates. What did you play? We were big FIFA guys. Oh, yeah.

I love FIFA. I think it's amazing. Have you played? Oh, yeah. I like FIFA a lot. You should play sometime. Yeah. You'll have to invite me.

But I'm old and I get confused and I just start hitting every button as fast as possible. Yeah. Yeah. Yeah. What team, when you play FIFA, what team do you? Chelsea. You're Chelsea. Yeah, of course. That's been rough.

Yeah. By the way, I can't believe you switched from Chelsea to Arsenal. I don't really understand it, but anyway. The sublime power of Ukaya Saka. And they have a guy named Jesus on their team. Jesus. How can you not root for a team with Jesus? And Martinelli.

Oh, love. Love the Gooners. You're the bandwagon, mate. I was in our closet at Arsenal. Bandwagon. Bandwagon. I've been rooting for Rangers. You were Chelsea, and then we fell to 10th, and suddenly you're an Arsenal fan.

No, I've never really been. I'm actually, the team I'm kind of warming to i really like i'm actually kind of fond of spurs just switching between all the london rivals well get back to me when you actually have a team that you support daddy is polyamorous by the way did i did i tell you i was dating a chick from netflix it was amazing after we had sex, you would recommend other chicks for me to bang. That's good, Ed. That's good humor. That's good. In three, two, one. Argentina has devalued its peso by more than 50%, bringing its value to $801 per dollar. The move represents the newly installed government's first attempt to jumpstart its faltering economy.

The poverty rate is roughly 40% right now, and inflation is on pace to hit 200% this year. Argentina's new president, Javier Millet, also plans to cut public spending, as well as energy and transportation subsidies, as the government works to bring its deficit to zero. So this is President Millet's solution, and he's calling this, quote, shock therapy. And that is, let's get rid of all of those currency controls, total free market guy, let's let the peso collapse to its true value. And to be clear, that's going to mean even more inflation, at least in the short term. I mean, literally overnight when this happened,

prices doubled for Argentinians. But then the idea is that once you've absorbed all that pain, you can start fresh with tighter fiscal policy, more responsible spending for the long term. Plus, you don't have this artificial, essentially fake number on the value of your

pesos. It's set by the free market. That's the idea, at least. So, I mean, a lot in there. But my question to you, Scott, would be, do you think that will work, this kind of shock therapy strategy that this guy's going for? Do you have faith in this plan? I would say, theoretically, it should work, but it won't work because it's Argentina. I mean, Argentina literally never fails to disappoint. In the 1940s, Argentina ranked among the top 10 wealthiest countries in the world ahead of France, Germany, and Italy. Get this, Argentina was ahead of France and Germany. It should have been Brazil, but with even cooler culture. And I don't know if that's possible. Brazil has a pretty amazing culture. But Argentina has just been the country that always fucks it up. And a series of populist

governments that print more money to try and get reelected in the short run, massive inflation, just reckless, negligent, derelict management of their economy, a populace that keeps going for whoever promises them. I mean, there's just some crazy stats. Like, I don't know, what is it, a third or half of the people in Argentina work for the government? But this is a total turnaround, right? I mean, this guy's saying, screw all that, let's do a massive 180. Makes all the sense in the world, except it's Argentina. Look, I love Argentina. I think it's got arguably one of the most textured, interesting cultures. And I remember I was an investor in a company called Olapik, and I was on the board. And we used to recruit

engineers from the University of Cordoba. They have actually a really strong engineering university there. And it was hilarious. In the budget in the board meeting, we had something like $4,000 a month. I'm like, what's it for? And it's for, oh, we can't touch this. It's for meat. The budget is for asado, and this is everything. Don't touch that budget. We need to fire people before are going over for an asado or asado in a week, and it's a religion for him. I mean, he has converted one of his kids' room into a meat cave and does asado on a regular basis. My point is that it's a wonderful culture, and they just can't get out of their own way. And this couple that I know left Argentina. The smartest people in Argentina have one thing in common, and that is they leave. The leadership there has been a disaster. They have great natural resources, great culture, smart people, good universities. And every year, every four years, whatever it is, they elect people who are corrupt yet stupid.

This guy just saying, all right, folks, we need to do something totally different. You can understand why that message resonated. So I hope it works. You know, I don't like the guy because he sounds a bit like a Trump figure, but they need to do something. They need, this can't be incremental. This needs to be full, you know, this needs to be open heart surgery, electric shock therapy, whatever the term is that he used. Just before we move on, one of his proposals is that he wants to dollarize the economy. He wants to scrap the peso entirely and replace it with the U.S. dollar. And his reasoning for that is basically, like you talk about, the monetary policy has been, he believes, irresponsible. And so he wants to basically eliminate Argentina's ability to ever print their own money in the future.

And we'll just, as you said, outsource it to the Federal Reserve and Jerome Powell. And by the way, he's been sort of walking that back recently. There are no plans to dollarize, at least in the immediate future. And this is slightly case in point. He's decided to just devalue the currency. But I'm wondering if you think that that's a good idea, because I think that the argument against it would be you're sort of locking yourself in to having no optionality in the future. It's definitely waving the white

flag. When you give up your currency, you give up a lot of control. Like you said, you're subject to the whimsert itself as a viable, credible currency. But to go dollar to me would seem like, okay, of the 215 countries out there, we rank as like number 213. It strikes me as a real loss of incredible national pride. And there's probably just, there's probably a number of economic scenarios where it makes sense for them to have input on their currency as it relates specifically to their own economic needs. The point that I would end on is, you know, you can have fiscal responsibility, you can have monetary responsibility, you can bring down inflation, but again, you will never figure anything out until you figure out what your output is. How do you increase GDP? And until Argentina can answer that question, then you're never actually going to figure out your economy. Well, it's like Paul Krugman said, productivity isn't everything, but it's almost everything. And they need to find an industry, they need to find an approach, a manufacturing base, agriculture, whatever it is

that attracts investment capital and that they produce the right human capital to sit on top of that financial capital and produce more than they take in. And it probably isn't going to be steak. Asado. It's, I don't know, football. You got to love those Argentines. Messy. Oh my gosh. Oh, they have a lot of Jesus Martinelli. These guys are all... No, those are Brazilians. I knew that. I knew that. We'll be right back with a look at the largest sports contract in history. We're back with Prof G Markets. Shohei Otani, a Japanese Major League Baseball star,

signed a 10-year contract with the LA Dodgers for $700 million. That's the largest sports contract in history. The terms of the contract, however, are what makes things interesting. Otani will only actually be paid $2 million per year for the duration of the contract. In other words, he's deferring $68 million per season. At the end of his contract, he'll be paid $680 million over time between 2034 and 2043. He also will not be taking interest on those deferrals. Scott, what do you make of this contract? It struck me as really interesting because young people oftentimes, or more often than not, will spend everything they make. And it doesn't matter if they're making $80,000 or $80 million a year. And we see that with professional athletes because it's kind of like being young and good looking. You can't imagine that either of those things are going to go away. And both of those things go away, Ed. I'm evidence of that. So this is, it's really interesting. One, it frees up capital so he can

be surrounded by other fantastic players and get some World Series trophies or rings or cups or whatever they call it. Quite frankly, he makes a ton of money in endorsements. As depicted in our book, The Algebra of Wealth, coming out this April, Penguin Portfolio Random House said, the key to building wealth isn't how much you make, it's how much you save, specifically your ability to live below your means, to spend less than you make, such that you can deploy an army of capital. And what this kid is doing is deciding, I'm going to live on 52 million million a year, not $112. And when I leave my income earning years or where I leave my athletic years, I am going to continue to get $60 million a year.

It's kind of the ultimate four savings plan. And usually those are houses or Roths or careers for people. One of the great kind of corporate tax giveaways, wealth builders, is the fact that you can buy a stock and every year it can go up 10% in value and you don't pay any taxes on it until you sell it. And then you should be thoughtful about not selling or trading stocks because every time you trade, you're going to get clipped for the taxes you own on any gains. And at the end of the year, if you have stocks that are down, you should think thoughtfully about selling them. And you have to wait 30 days to buy them back, but you should think about taking losses at the end of the year. The tax game is a complicated but important game that people need to understand. And this kid clearly, just super impressed by this kid. I have no idea about his athletic abilities, but I would hire him as an accountant. Yeah, well, apparently he's the greatest player of all time, but I don't follow baseball. So there's that. But just for like regular professionals who might be listening,

I mean, yeah, I look at this, I'm just like impressed by the level of sophistication and creativity that he brought to this contract and deciding to defer those payments. What can we learn from this in terms of contract negotiation do you think it's are there ways for regular people to use this same strategy well okay first off most of us aren't going to be blessed with this problem right we're not going to be in a position to demand three quarters of a you know billion dollars in 10 years well then not that number but yeah well okay there are a few things you can do the basic stuff is find out what tax advantage or deferred vehicles your company allows you to invest in and specifically which ones do they match and force yourself to max all of them out. You want to put yourself

in a position of forced savings because see above young people don't save money on their own. Also, if you're negotiating a comp package at a company that has equity, what I always tell people when they ask me for advice negotiating their comp package at a company that has equity, what I always tell people when they ask me for advice negotiating their compensation package is the ask should be on the equity portion. And that is, you're going to spend whatever they give you. You're going to spend whatever salary. The real ask should be, if there's opportunities for profit participation or there's opportunities for options, that's where you want to strike. That's where you want to really kind of maximize your leverage and say, okay, I'll take the salary, but I would really like to feel like

an owner. Can we increase my options package or my profit sharing by 10, 20, 50? Can you double it? Whatever it might be, because those options and that equity in a company, it grows tax deferred. Now, granted, you're putting your money at risk, Amanda being worth zero, but show me someone who's made a lot of money working for a corporation, and I'm going to show you one of two people, someone who's a little bit older and has put money away through a forced savings plan or is incredibly disciplined, which most people aren't, or two, someone who has managed to be able over the years secure a decent amount of equity that has grown tax deferred, and because they don't increase the quality or their standard of living to their current income because they can't spend that money, see about more forced

savings. And then the company gets acquired or the shares vest, and they get long-term capital gains on that equity. Only if they exercise the options and hold it for longer than a year. But you want to be meeting with your accountant and saying, how do I set up forced savings? And how do I turn current income into equity that has long-term tax treatments? Do you have any thoughts on when people should ask for more than they've been offered when you think it's appropriate or effective? Your time to negotiate is around either when your shares have all vested after four years, usually, and you get a new award, a new equity package, you get a promotion. Well, okay, what's going on

in terms of my compensation, and do I get additional equity? But the reason why the majority of people who accelerate really quickly in their careers, the reason why many of them have skipped jobs is because the time to negotiate a much bigger salary and additional equity is usually in the context of a new job being offered. So that's the time when you kind of have the most leverage because usually strangers are more attractive to people and they think you're better than you are because they don't know you. They don't know that you have a meth habit and you go off and do these stupid skiing races. So that's when you can strike and ask for more. But in general, you just want to set up a series of forced savings plans for yourself.

All right. Thank you, Scott. Let's take a look at the week ahead. We'll see the personal consumption expenditures index for November and consumer sentiment for December. And we'll also see earnings from FedEx and Nike. Any predictions? My prediction is in each year, we just did our predictions webinar. I always pick one big tech stock and I'm picking macy's no i'm picking

oh that was good i'm picking alphabet i'm blown away by gemini and i think about the data that gemini will have proprietary access to specifically your youtube viewing patterns and your gmail account sort of your deepest, most valuable, most intimate information that they should be able to offer a really sophisticated and utile AI, similar to the way that they have so much data around your searches that they can make every incremental search better and have been able to pull away from everybody else. So I think 2024 is the year that the empire strikes back and the Gemini will fuel outperformance and alphabet stock. This episode was produced by Claire Miller and engineered by Benjamin Spencer. Our executive producers are Jason Stavros and

Catherine Dillon. Mia Silverio is our research lead and Drew Burrows is our technical director. Thank you for listening to Property 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. Kind reunion As the world turns And the dove flies In love, love, love, love So speaking of predictions, we'd like to hear predictions for the year ahead from our listeners. For a chance to share your prediction for 2024 on our show, send a voice recording to officehoursatproptumedia.com. Again, that's officehoursatproptumedia.com.