This week's number 13 million.
That's the number of people in the US who say social media content creation is a full-time job.
I have no problem with influencers, although I missed the days when they were just called hookers.
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Welcome to Proctee Markets.
Today, Ed, we're discussing NVIDIA's Earth.
earnings and the U.K.'s fallen empire.
What's the difference between an influencer and a philosophy major?
Well, an influencer didn't need a degree to be f*cking useless here with the news.
What are we talking about?
We're talking about NVIDIA's earnings, the.K.'s fallen empire.
We thought we'd bring you in as a 19-year-old Brit.
You're our expert on the United Kingdom.
And Ed, most importantly, I don't know if you heard The dog was on the view.
The dog was barking today.
I heard how to go.
You know, it really nice is I was nervous about it.
I didn't.
I don't know.
I did.
Somehow I imagined.
my big moment on the view wouldn't be a good one.
I I thought, this is so rife with trouble and danger for me to sit down with four incredibly progressive women, except for Elissa Farah.
And then whoopi is obviously an icon and a legend.
It was And I walk into the green room and there's George Hahn, M.J.
and M.J.
.J.
and and my blood pressure came down and it actually felt really nice to have everyone there.
So nice.
I saw that picture you posted.
I that.
It really well.
I'm what's the term?
I killed it.
I killed it.
Anyways, here with the news is Prof.
G media analyst Ed Elson.
Everyone, go subscribe to the PropG Markets feed if you haven't already.
We have our own feed now, PropG Markets, please subscribe.
We put a link in the show notes to make it easy for you or you can just type it in on your search bar,
PropG Markets.
You'll get two episodes a week on that channel,
one on Monday, one on Thursday, almost recent episode was an incredible interview with Josh Brown of Rick Holtz Wealth Management.
We've got lots more interviews, but they're only going to be available on the PropG Markets podcast feed, not go subscribe now.
The sensational of Alexa will be available later this year for an additional subscription fee, separate for Amazon Prime.
Walmart and Target reported first quarter earnings, and it was a tale of two retailers.
Walmart's sales rose 4%, targets dropped 3%.
Both companies, however, announced that they're slashing prices to entice inflation-wearing customers.
Hymns and Herr's health will begin offering GLP-1 weight loss injections for $199 a month.
That's roughly a 7th of Wigovee's price.
Hymns and Herr's stock rose as much as 38% following that announcement.
And finally, former presidential candidate Vivek Ramaswamy has acquired a.7% stake in BuzzFeed for about 7 million.
the SEC Ramiswami said he wants to speak with the board about a, quote, shift in the company's strategy.
Buzzfeed stock serves as much as 82% following that news.
Scott, thoughts?
So, first, with respect to Amazon, if you think about the front end of an LLM, it should be voiced, right?
That's a logical next place.
Every year I pick a technology that I think is going to be the technology of the and think in 2018 maybe,
I that voice I thought was going to be the technology of the And interesting is in the last two years,
voice assistants have actually lost share.
And they got out of the gates really strong.
I love voice.
My kids love it constantly whenever we get in an argument to like Alexa how many f a cups is man city one right they just can't stop Alexa in a weird thing i don't know
the street it feels like Alexa has gotten stupider in the last 24 months or other things have caught up.
But it's lost a lot of credibility at least the galway household.
So I'd be curious to know what is the time with anthropic I like moving to subscription this makes a lot of sense to me
It'll be it to a certain extent.
It'll be a proxy on how sophisticated and how agile their AI efforts are.
Do have any thoughts here?
I just find it interesting that everyone's calling this like the AI powered version of Alexa.
When in reality, Alexa's always been an AI and what they should really be calling it.
When you mention Alexa's getting stupid and they should just say it's the smarter Alexa but when you say AI, obviously that generates more buzz.
Labeling aside, it is interesting to see this resurgence of voice.
I mean, this all started, as you mentioned back with Siri in 2011, which was 13 years ago.
I feel like people forget how old it actually is.
But the story of voice has not been a very good one.
I Siri is considered to be basically one of the worst Apple products of all time.
It not successful.
Alexa was kind of successful, but not even close to the way that Amazon wanted.
They wanted it to be basically a tool to boost e-commerce.
on the actual Amazon platform, but it basically had no effect on the top line.
It was more of a gimmick.
And now here we are again.
It's 2024 and we're having the same conversation.
The difference is, is, it's the gen AI generation, AI is supposed to be smarter, more more conversational.
It'll be interesting to see if it works, but is certainly possible that this is just 2011 all over again.
I it's more of a brand move, right?
If the new Alexa is really sophisticated, everyone's going to go, oh, that must mean that anthropic and cloud are really, are really solid.
The initial thought was that Amazon's vertical integration into the would be, essentially, I'm going vertical to control an operating system, right?
And Amazon has 500 million Alexa-enabled devices.
So is, everyone wants to control the interface with the consumer.
The reason you make such a huge investment in retail is that you get custody of the consumer.
You control the interface between you and your And these guys are all in a war.
This is what Meta's been trying to do forever, and they launched the portal, that didn't work, right?
I think Facebook even had a phone at one point.
Is that right?
Amazon had a phone.
They've all gone into the phones and realized it's really f*cking hard and expensive, and they all get beaten back by Android and iOS.
This is their attempt to go, again, vertical.
I think it's more,
it'll be more a brand signal similar to the way that what a car sounds like when you close the
door or when you can't go kick the tires, it's or the pillows in a hotel.
There's all these kind of quality cues for a brand.
I think that's exactly right.
Walmart Target.
I'm reading this story and I thought there's just a things I care less about.
I think the trouble is that you probably haven't been to a Walmart.
What three decades,
the last time I went to a Walmart was when I was speaking to the board of Walmart in Little Rock and I might as well go see what the nicest Walmart looks like and I
went and it was it was quite nice.
I actually love Target.
I go to the Super Target in Boca Raton.
My kids love it.
I love it.
I love buying a super case of 700 vitamin waters, I like that stuff, I think they do.
And think Target does a good job.
You are an inventory management nightmare.
100%.
100%.
But what I'm curious about, and I don't know the answer here.
is that the difference between a company going up 4%
and going down 4% is literally one will trade it double the multiple of the other.
If you're going down 4%, that's a 4 car or a 5 car alarm among target management.
And thing that people don't realize is that Walmart is essential.
a groceries company.
It gets 60% of its U.S.
sales from groceries compared to just 20% at Target.
So I wonder if this was more a miss on kind of the soft goods.
Year to date Walmart is up 24%, which is pretty impressive.
Any thoughts on what happened here?
I think most notable to me was the price decrease.
and Walmart and Target both lowered their prices on thousands of items and we're not just talking
about like one-time purchases like a TV or an AC unit.
We're talking about everyday grocery items, milk, bread, paper towels, butter.
We're seeing price decreases as low as 40%.
on some of those items.
So is a big deal for consumers.
I think the question is whether those price cuts will proliferate into the rest of the and help bring down that 3.4%
inflation number we keep talking about.
I feel like the answer would probably be yes.
I like Walmart and Target are leaders and consumer, but perhaps you have a different view.
So I think you just zeroed in on what probably was the most important thing in this earnings call.
And that is the largest retailer in the world is going aggressive way around price getting.
And that should have an impact.
As Walmart goes, so goes a relatively significant part of the economy.
It really is the ultimate kind of consumer thermometer for the lower middle class of America.
Strategy all comes down to answering one question.
What can we do that is really hard, really hard, that no one else can do?
We look at our assets,
our our then look at the marketplace and we try and cut a swath down the middle and say,
all what could we do that no one could follow?
Even if it's a good idea,
you want to make sure it's sustainable and other people couldn't follow because otherwise But these companies,
whether it's Netflix,
whether Amazon, they take their capital as a weapon and they offer value proposition that others just don't have the scale to compete with.
This is Walmart leaning back and following their core strategy,
and that is every time they cut costs, every time they get scaled, they pass on those.
savings to the consumer.
But is a great report for Walmart and an ugly report for Target.
Yeah, folks on hymns, GLP1.
You know, the market loves this.
The market says this is the biggest thing in health care, and one of the biggest things in the economy the last decade.
So embracing this is just a great, great strategy from an investor relations standpoint.
Stocks of $0.77.
I think he got a hand it to these guys, hems initially.
It was like, oh, I want Viagra, but don't want anyone to know I have Viagra.
Just saying for a friend, saying for a friend, saying, I don't know, I don't know anything about it.
It's quite hard.
Just, you know, I do not suffer from erectile dysfunction.
I absolutely do not.
Although I will say this, my erections are dysfunctional.
It's oh, now you show up.
Anyway.
Okay.
That was good.
That was good.
Anyways, so I'm told it was an ED company bought.
Oh, it was an ED company and then went to hair loss.
And they've really extended themselves and kind of become this what I'll call new economy sort of innovation-ish kind of healthcare company.
And I think it could have easily been one of these dumb ideas that's spacked.
I know if it was a spacked.
It was actually, yeah.
It just sort of floated away, right?
That the cheap capital party was over, but they spent a while.
This traction is a And that they have actually crossed a Rubicon and they're a real company and that they're making good moves.
I think this is a great move.
What are your thoughts?
Well, two things stand out to me about this.
One is the price.
So, you know, a Zen pick is $1,000 a month.
We're Govea's $1,400 a month.
This is $200 a month.
It's crazy.
So the question is, okay, how is it so cheap?
Well, this second very interesting detail should explain it.
Unlike Mozambic, unlike Wigovii, unlike Zepbound, this GLP1 drug doesn't have FDA approval.
And yet they can still sell it legally,
which is incredible for the business because one, they don't have to deal with any of the FDA approval costs, which are a nightmare.
And two, they get to participate in GLP ones, one of the growing industries in the world.
It turns out that there's a provision in the FDA's regulations,
which says that if a drug is in shortage,
Then, manufacturers can sell compounded versions of that drug, that a sort of combined alternative mixture of that drug, and they don't need FDA approval.
As of today,
Ozempic, Wigovi, Zepbound are all on the FDA's drug shortages list, because as we've seen, there's been this huge demand that's outstripping supply, and Hymns recognize
that.
So, this to me Again, great management.
It's a masterclass in regulatory arbitrage.
It's added almost a billion dollars in market value overnight.
Probably it's estimated it's going to generate a hundred million dollars in annual revenue.
I the question for them is going to be, what are they going to do when the drug shortages end?
Because I can't see a world where ozempic is low on supply forever.
Hymns won't be able to sell this anymore.
So I think if I were investor, that's what I'd be wary of.
I've often thought if I was young and scrappy and didn't have quite the profile that I've earned by going on programs,
including a video, I would, I'm not exaggerating.
I would probably be going to the grey for GLP1 drugs because you can get these things and Dubai for a
and there are 1,000 here.
And I've liked that type of grain market.
I there's such regulatory capture in my pharmaceutical firms that it's just nothing but attacks on US consumers who have the
pretty average healthcare and pay double, pay $13,000 per capita.
So like the idea of people being very aggressive.
One my, I got one of my favorite movies, but the movie that Matthew McConaughey won an Academy Award for was Dallas Buyers Club.
And he just,
you know,
he found that the FDA was,
you of the drug administrator,
the pharmaceutical lobby, and just started going to other nations and finding drugs that, you know, these people didn't have a lot to lose, right?
And I like the idea of anything that f*cks with big pharma, I just love.
And I, at some point, I don't know why this makes me so happy, but commercials TV with ads.
It's basically, this show is brought to you by how much it sucks to get old.
I mean, that's all it is.
It's just a giant.
It's like nine minutes of murder.
She wrote or whatever it is.
I watch murder show.
I'm to think of what I watch or MSNBC.
I watch Rachel Maddow.
like, oh, do have opioid-induced constipation?
I'm like, what the f*ck is that?
So when I get this,
I'm in so much pain, I have to take an narcotic that addicts me and I get constipated, by the way, I an oxy story.
I had minor surgery.
and they gave me OxyCon, and I totally freaking freaked out.
I'm like, oh my god, I'm going to get addicted to this sh*t.
And about two, three days into my Oxy, I started, they suggest you kind of wean off after two or three days.
And I just felt like sh*t.
And I'm like, oh, I'd like felt just strange and really irritable.
And called my doctor and I'm like, oh my God, I'm so f*cking freaked out.
And he's like, what's up?
And I said, I think after 72 hours, I've become addicted to Oxygen.
And about to be a character in dope sick.
And he goes, describe your symptoms.
And I'm like, I feel bloated.
I feel gross.
I feel sick.
And I really just want oxygen.
And he's like, oh, It's like, you're not addicted, you're constipated.
He's like, once the last time he went to the bathroom, I'm like, let me think, 11 days ago.
And he's like, go get some prune juice.
He's you're addicted to OxyContin, you're just backed up.
Anyways, I don't know where we are.
Prop subscribe now to Prop G Markets.
We're at the end of that segment.
pivot to the vague buying a steak and buzzfeed.
Do you have any insight on that?
Speaking of sh*t flying out of your ass, whatever, it's $7 million.
I mean, who cares?
And he wants to talk to him about strategy based on his success,
getting his mother to rewrite FDA approval or whatever it is he did to make his money.
I know.
BuzzFeed has become irrelevant and it's probably going out of business,
I don't know if it's out of business, I know if they've their costs enough to survive.
It strikes me as a fairly inexpensive way to and be in the news cycle.
That's all I see here.
I think he's gonna have any, he has no background in media.
I think he's an original thinker.
I just think he wants to be.
Look at me, look at me.
Pick as vice president.
Pick me as vice president.
Look at me for seven million.
I could either buy.
some ads,
which don't help,
and that money vanishes, or I buy $7 million in stock, and people on the prop G markets pod will talk about me.
I think this is a big f*cking nothing burger.
That's awesome.
And on that, let's stop talking about it.
We'll be right back after the break, with a look at Nvidia's Hangs.
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We're back with Prodigy Markets.
In video reported first quarter earnings and once again, it blew past expectations.
The company generated $26 billion in revenue, up 262% from last year, and $15 billion in profit, up more than 600%.
The company also announced a 10 for one stock split and lifted its dividend.
Shares rose more than 7% in after hours trading and breached $1,000 per share for the first time.
Scott, last week we discussed this possibility that the AI boom has become a bubble.
We discussed that just you and I and also with Josh Brown on Thursday.
I look at these numbers, though, $15 billion in profit.
$23 billion in data center revenue, which basically the AI chip revenue.
That's up 427% year over year.
These numbers look very real, very serious.
Do these earnings change anything for you?
No, I think we predicted they were going to blow away everything.
When get this big, it's hard to wrap your head around.
So for relative comparison, this company has added the value in the last 12 months.
It's added the value of Amazon.
It's now worth more than Tesla and meta combined.
It's worth more than the entire German stock market and if you took all of the transactions
that happen all year in Spain and all year in the Kingdom of Saudi Arabia,
they're GDP from both nations,
that's not as big as the market capitalization now of NVIDIA, which is the third most valuable company in the world.
It trades at a priced earnings ratio of 56 compared to 24 for the broader S&P.
So think, okay, that's expensive, but it's not crazy given the growth that you referenced.
I think the problem here is not the priced earnings multiple.
It's the E.
And that is,
at some point,
I do think people are going to decide,
I'm Chick-fil-A,
I don't need I don't need to rent this type of compute powered by GPUs,
and the first sign of a slow down here is going to freak everyone out.
You'll see multiple attraction.
In addition, you'll see earnings contraction, and the thing that I think is going to take the stock.
I mean, this is a bubble.
The question is, when does it pop?
And this isn't financial advice, because the company could easily...
It's just a momentum and a hysteria and excitement around AI.
This talk could easily double But I believe this is a bubble and what I ultimately think it's gonna be
the air coming out of the bubble, if you will, is that there are, what did Josh Brown call it a self-propetual motion machine?
The perpetual motion machine.
There are four companies, Amazon Alphabet, and Microsoft, that account for 40% of total sales.
And of those companies really hate and basically being asked to put on a gag ball and grab their ankles.
I because the pricing here, they have such incredible power.
It's just got to be the worst thing, the worst negotiation in the world for these guys.
They're not used to it.
They're the ones that are used to it.
people, right, in a third part in a negotiation, and are the little guy when they go to Nvidia.
So all of them are massively investing in developing their own AI chips.
And the first one that comes out with a reasonable chip,
you're just going to see,
I mean,
sort of like when Apple said, we're sick of these negotiations and one way conversations with Intel, we're going to develop our own chip.
And also, what's really interesting is, Aswaq made such an interesting comment about the valuation of NVIDIA.
He that built into the valuation is the assumption that NVIDIA will dominate another market the way it dominates AI that hasn't been invented yet,
that knows yet, in to grow into its valuation.
And you can see that Janssen either listens to Aswaq, and now he's talking a lot about the sciences.
He's saying, oh, the opportunity, you know, for our chips, he doesn't say AI is the health sciences.
So he's saying, okay, at some point, we'll run out of steam, you know, AI does have limits, but don't worry.
All these healthcare companies are going to start buying our GPU.
So, this is nothing short of absolutely staggering.
Historically, the semiconductor industry is cyclical.
I see why this would be any different.
Kudos to them, a staggering earnings report.
I that they're creating all of this wealth for their employees and for their investors.
I don't know where the stock's going to be over the course of the next 20 years.
But I would predict that in 20,
you call it 18 to 36 months,
it's wealth south of where it is right now I just don't see how with these types of margins and this type of dominance in a market that's so
important So huge has so many powerful players with their own capital their own
that these types of numbers just aren't going to attract the biggest great whites in the world.
What are thoughts?
You mentioned Jensen building in new expectations.
I think he said that this was going to be on this most recent earnings call.
He said that this is the next industrial revolution.
But I want to pivot to just this analyst note that I was reading.
I found this line that I found pretty funny.
It quote, Nvidia generated revenues that were around 5% higher than what the analyst community had expected.
While this was a positive result for sure,
the beat was less pronounced compared to the previous two courses when revenue estimates were beaten by more than 10% respectively.
In other words, that we're not even happy with beats anymore.
We're measuring how much today's beat beat the last beat.
It feels like we're not only building high expectations,
we're building totally new kinds of expectations for this company just because of how much it's outperformed.
What I'd ask you is based on your experience as an investor, have you ever seen earnings growth that is this strong and this enduring?
It's been several consecutive quarters of triple digit revenue growth.
This is, yeah, I mean, you're exactly right.
You by 20%, you only beat by 18%, you only over delivered by So, the expectations here, there's companies to find gravity.
You argue just on a shareholder ability to create your older value.
Nvidia at this point is probably the most successful company in history.
Very companies are able to add the GDP of Germany in 18 months.
There's something about,
and to me it goes to a larger thing,
this a Taiwanese,
I think Jensen's from Taiwan,
he went to school in Oregon, and then he went to Stanford and he decided to start the company in San Francisco.
There's just no getting around it.
There's something very unique about America and specifically the Bay Area when it comes to cold hard cash.
It's important that we keep doing this because these companies,
while they pay less than their fair share, less than your fair share on the GDP of Germany, is a lot of money.
These companies pay a lot.
I bet that Nvidia will be responsible for a loan, will be responsible for a budget surplus in California this year.
I bet anyone who's been there longer than three years,
who's in a quote-unquote professional track job, has $10 million plus in options equity right now.
And then when they exercise those options,
those they have to pay short-term capital gains on plus the 13%
that goes to the state, that's just a massive amount of time.
I mean, I've always said, there's very few problems money can't solve and people hate hearing that.
But I've always thought, you know, other than health, and even with a lot of health conditions, money can solve it, most things work out.
I have a friend who's going through divorces, who's upset, and I know his wife's going to be acting.
I'm look, this is the bottom line.
It's going to be a lot less painful for you guys because you This company,
I don't know what it added, it $150 billion in five minutes.
If you had $150 billion in market cap to the economy in five minutes after your next call,
you should be able to figure out a way to expand the child tax credit,
which costs $13 billion, I So, anyways, a long limited way of saying Go America and just quickly investing 101.
They also announced a 10-4 on stock.
split.
Can you just remind all listeners what a stock split is and why a company would do that?
Well, they want to make it more affordable and seamless expensive.
So the stock, what is it out today?
$1,100 or something?
Yeah, I think $10.50 or something.
Okay, so let's call it $1,100 by tomorrow.
So it's $1,100.
All they do is just go 10 for one.
So now each share of stock costs $110.
And what I hate is I saw some headlines today saying the stock's about to become a lot cheaper.
Now not.
You buy a stock based on valuation as it relates to its underlying fundamentals.
The valuation is not changing here, just the number of shares.
As matter of fact,
something I learned from one of the VCs I worked with,
is was issued at the very beginning of the company, you issue shares, you you have a certain number of shares.
And the founder, at least initially, you own all the shares.
giving options out on those shares to employees,
hopefully you get an investor, you him or her new shares in the company, which dilutes your stake.
And what I initially always just formed the company with a million shares.
And one of my VC said, no, form it with a hundred million.
I said, well, why?
Why?
He said, because if you give someone 1% of the company, 10,000 shares isn't nearly as exciting.
Psychologically, it's a million shares.
Even though it's the exact same thing,
even though you're just on 1%
of the company, it's still, he said, just I'm like, people really that dumb, he's like, yeah, people really enjoy getting a million shares.
or options on a million shares.
And exactly what this is because now with fractional buying,
there's really no reason to split the shares other than to signal how strong the stock is and also
to psychologically make it easier for someone to say, well, I'll some shares.
It's only 110.
I can buy two shares as opposed to saying, oh my god, $1,100.
I missed that.
You know, I miss that boat.
So it's, I would argue it's mostly symbolic and it's mostly just to give people the impression somehow that the stock is affordable.
It's all, it's really psychological and it's nothing to do with the underlying fundamentals.
We'll be back with a look at the UK on a surprise general election.
Stay with us.
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Innovation.
British Prime Minister Rishi Sunak shocked Parliament last week and called for a surprise general election on July 4th.
For our American listeners,
here's what that In Britain, parliamentary terms last five years, and Sunax is due to expire at the end of this year.
However, unlike in the US, the Prime Minister can decide when to hold a new election during those five years.
So why has the Prime Minister chosen now?
It isn't totally clear, but it likely has something to do with recent economic data.
Before his announcement, the reported 2.3% inflation, which is its lowest level in three years.
Meanwhile, GDP grew 0.6%, which technically brought the nation out of a recession.
However, these are small wins.
The economy is still largely in decline,
and the nation is still reeling from the disastrous 44-day tenure of the previous Prime Minister, Liz Truss.
And now, after 14 years of being in charge, the Conservative Party looks set to lose.
Its opposition, the left-wing Labour Party, is currently leading the polls by more than 20%.
Scott, you recently moved to London.
I think that gives you a right to Talk about this.
What are your thoughts on the general election?
I have really enjoyed understanding almost nothing about U.K.
politics.
One the reasons one of the free gifts would purchase in moving to the U.K.
is that discussions around assault weapons,
bodily They're not even discussions there because they would look at you like,
well, of course, a woman can terminate a Why on earth would we have AR-15?
They just are remarkably sane.
I like Prime Minister Sunak.
He strikes me as a really reasonable, thoughtful guy.
It's a parliamentary system.
So people are sick of the party.
I blame them This is I think the UK is the only country in the EU that hasn't grown in five years
Brexit will probably go down is the biggest self-inflicted wound since probably George W Bush invaded around It's like,
how do we make things more expensive and make our economy less productive at the same time elegantly?
I remember being in Cannes when it went through, and every Brit was just dazed.
They couldn't believe what had just happened.
Anyways, the GDP growth since 2016, this is eight years.
In the EU, it's been 24%.
In the U.K., it's 6%.
Since Brexit, U.K.
goods trade has underperformed other advanced economies by around 15%.
U.K.
consumer prices have risen more than get this at 30% since mid-2016 compared with 27% in the U.S.
and% in Europe.
So down expands us up.
In the immediate minutes following the referendum vote, the British pound dropped 8% with 31-year low against the dollar.
The pound has never recovered to pre-Brexit levels, and the brand as a financial capital of Europe has suffered.
Paris overtook London as Europe's largest stock market in 2022,
and the total capitalization of London list equities fell from a high of in 2007 to about $3 trillion in February 24th.
Think that.
The capitalization of this market in the last 17 years has gone from, has basically been cut.
by 30%.
And just on an inflation adjusted basis, it would be six or seven trillion.
So it means they've lost a ton of share.
Over the same period, the value of US stocks almost tripled to 53 trillion.
So UK from 4.3 to three, the US from about 18 to 53.
And the total value of IPOs in London last year was less than a billion total value of US IPOs.
And this was a slow year, 26 billion.
I want to flip this back to you because I don't feel,
I'll give you some comments on people constantly ask me now what's the from the UK and the US and I have been struck by how underwhelming the business environment
is given the pillars and the foundation that the UK sits on.
First off, it has incredible universe.
It has really fantastic raw talent.
I I've met so many impressive people there that it's, you just can't get around it.
This is some of the most educated, interesting group of people.
It has an amazing culture.
So a lot of very important people with a lot of influencing.
Well, okay.
I move, I could move to Seoul, Korea, or I could move to London.
Seoul is an amazing city, but the majority of people I would assume would pick London.
But at the same time, what I've also noticed is that there's no actual organic value creation.
Everyone I meet there is servicing has made their money by servicing wealth created elsewhere.
The most successful people I know are investment banking,
are in wealth management and they're servicing the wealth of people who have made their money in the Gulf or in the U.S.
and they're either in hospitality or But other than primarily football, the hospitality and tourism industry, I'm like, where is the actual mojo here?
Where are the companies?
What's the tech?
Yeah.
And do have some FinTech, but it's just, it is really an interesting question.
I know how to answer it and I'll turn it back to you.
But the fundamentals, given the foundation of all the things you need or supposedly need for success, what is missing here?
Because there's nothing resembling Christ, there aren't even that many buzzfeeds there.
Seven 10 IPOs in the last 10 years are below their offering price.
So I'll turn it back to you.
You grew up in the UK.
You came to school at Princeton.
You're obviously, you are the secret sauce.
Young, talented, educated people who want to work hard and make money.
and are good people are the secret sauce and the economy.
And the fact that you stayed here as opposed to going back where you have family,
where you speak the language, And you decided to stay here.
So what do you think is the issue in the UK and why did Elton, given the option, decide to stay in America?
Well, I'll start with the economics and I'll return to my read on the cultural differences, which I do believe are important.
But let's just start with the economics and the economics are dismal and the UK went into recession in the second half of last year.
Two straight quarters of negative GDP growth and the quarter before that the growth was flat.
Let's have one of the worst post-COVID recoveries.
Stock market's been sluggish.
You you know, some some tech companies, for example, Arm, which the AI chip manufacturer.
They are based in England, but they decided not to list on the London Stock Exchange.
They went to New York.
Valuations are cheap, and US stocks are trading at around 20 times earnings in the UK.
and then there's this national debt problem too.
It's not as bad as the U.S., the U.K.
has around $2.7 trillion in debt, and that's around 97% of GDP.
Nothing like America, but we also have to remember that U.S.
is in a privileged position to borrow because it's the U So, everything's, generally speaking, everything is going wrong.
And the question is why.
I there are two main reasons.
One, and this is what the Tories will argue, that is the Conservative Party, is that this is a Europe problem.
There's a wider problem in Europe.
Europe as a whole has been struggling with growth for decades.
It's struggling to bring an investment, and that's true.
The second reason.
is specific to the UK,
plain and simple,
it's Brexit and at a time when growth was sluggish,
along with the rest of Europe,
The UK came up with basically the most English excuse in history, which is it's not our fault, it's theirs.
And you mentioned,
it was a populist movement,
it started with Nigel Farage, it played into all these weird emotions of English pride and English heritage, and also dismissal of foreigners.
MPs in Parliament lacked the spine really to speak up about why it was a bad idea.
And it will go down, I believe, as basically the most disastrous and damaging economic decisions in history.
It cost the UK 4% of GDP.
Remember, this was supposed to stimulate the growth, tariffs increased, which
the cost of goods, including food, Brexit estimated to have contributed to a third of food price inflation.
Workers left, estimated 330,000 jobs lost due to Brexit.
It interesting, especially the skilled workers.
England was struggling with this thing called Dregsit, which is where all of these young doctors decided to pack up and leave.
And they need to figure out how to revamp the NHS and get doctors back into the UK.
I'll pause there,
I'll just say,
I think this entire election comes down to this, which is the UK went from a majority voting to leave the European Union.
and it's now reckoning with only 30% of the population believing that this was ever a good idea.
So question voters are asking themselves is who was responsible for the worst economic decision in history?
I the answer is really the voters, but they will say it was the conservatives.
you ask why I left.
I the answer, I was born and raised in London, but both my parents are American and they encouraged me to apply to American schools.
So I did and I went to school in the US, that's why I left.
The other question you asked is why haven't I gone back?
There's one crucial cultural difference between here in the UK, which really bugs me.
And I think it's very well exemplified by the grading system that I grew up with.
So in America, I got one grade, A, B, C, D, E, R, F.
In England, I got two grades.
One was your teacher.
which is right, one through five.
And the other was your effort grade, which was A through E.
So the first measured how well you actually did and the other measured how hard you tried.
Two separate things.
Now, all the teachers told us
that the best grade you could get was an A one, but all of us knew that wasn't actually true.
The students knew that the best grade you could get was an E,
Meaning, you got 100%, you were top of your class, and you didn't even care.
Maybe you even misbehaved.
You didn't care.
So you didn't care at all,
but you still achieved and to me this is the perfect encapsulation of English culture where we have this obsession with not trying not taking yourself seriously and
worse not not caring and I believe that if I'd stayed in London,
I don't think I'd be where I am today because I never would have believed in myself or taking myself seriously enough to say
maybe I'm good enough to sit in the same room as Scott Galloway.
That would have been an embarrassing thing to try to do.
And I think it's actually a real cultural problem in the UK.
I it's why we're seeing this lack of creativity, this lack of innovation, lack of inspiration, and crucially, a lack of leadership.
I mean, you look at Boris, that is the most E1 guy you've ever seen.
His hair, his clothes, his demeanor, it all screams, I'm the Prime Minister, I'm talented, and I don't give a sh*t.
I just sort of showed up here and it just so happens that I'm the most powerful man in the country.
And this is everywhere in England and it's rewarding.
So, I think this is why you're seeing the same guys leading in government and leading in business.
They went to the same schools.
They all basically went to Eton,
and they all went to the same universities, which was Oxford or Cambridge, and they all learned the same thing, which is...
but the best thing is to never try while you do it.
To be accidentally successful, the of being accidentally successful.
Yeah, there's also one thing I've noticed
in the limited business meetings I've had is that meetings in New York, people are very much, okay, what are you doing?
That's what we're doing.
Okay, it was nice to meet you, but I don't see a fit here, great, onward.
Maybe I'll see you at zero bond or so-and-so.
People generally capitalize, how can I help you, how can you help me?
No, I don't like this.
Let's move on.
Or this is great.
How do we make money together?
Let's get on it.
And your way home, you'll start sending them emails.
They'll start sending you emails.
Whenever done anything resembling a business meeting in the UK, it just so lovely to me.
I think every meeting went modestly well.
Three or four days later, I'll get a meeting saying, we should definitely follow up.
I'll send you some dates for fall.
It's just, it's like an indefinite maybe, and the way I would describe Ed Elson and every other ambitious young person in the UK.
is I think you're going to be successful in the UK.
I think there's opportunity there,
but the way I describe it is you'll reach that level of success at 40 versus 30 here in the US.
I mean, the side is, my father, despite his lack of education, always just had real insight.
He said to me, he said, Scott, America is a terrible place to be stupid.
And what he was saying is this country believes in winners and losers.
And if you're stupid here, you're gonna fall further faster than in Europe.
But at the same time,
if you're smart in your hard work,
working, there's no mowing the long or trimming the daisies or cutting people down, which I think is what happens.
You're supposed to kind of wake up and be accidentally rich in the UK.
That's why they're all, I mean, they're all rich, children of rich people.
That's why they have that opinion.
Dynastic wealth.
That step out of your class is uncouth.
It's like unappealing.
It's, you and even you can even feel some of it in the U.S.
based on There's a European kind of similar sensibility on the East Coast.
I remember when I first moved back to New York and I was single and people were trying to set me up,
they would say she comes from a good family.
I'm I could give a sh*t with my family.
I don't want to meet the family.
I care, I'm going to make my life.
People on the West Coast brag about having poor parents.
They're proud of the fact that they came from nothing.
Whereas in the East Coast, and I think it's much more European, your background, your roots, your dynasty are much more important.
But there's a culture that I think the root for the most successful people,
you know, remember kind of the Silk Road or whatever, all these trade routes, there is a trade route in human capital.
The most talented people in the world get to the biggest city in their nation,
then they get to London,
Shanghai, Singapore, and then the real ballers, the real ballers end up in New
York, And then when they decide to, they want to call their life, they end up in LA or somewhere else in America.
But the most successful, most ambitious people in the world end up over US airspace at some point.
Let's take a look at the week ahead.
We'll see data on the personal consumption expenditure index for April, and we'll also see earnings from Salesforce, Costco, Do you have any predictions, Scott?
So I was fascinated by, I don't know if you saw it, but was a $250 million deal struck between Newscore and OpenAI.
Yes.
Way bigger than all the previous ones.
And think this is a big deal because basically it establishes a precedent that these companies
who have crawlable data or that have the kind of content that would be good risk for the
these prices are going up and I think it's essentially establishing or normalizing the idea
that a lot of these content companies are going to be able to find an additional incremental revenue stream that will be very high margin.
So my prediction is companies like Strangely Enough are coming like Gannett,
which has just gotten the sh*t kicked out of it, a bunch of local newspapers, USA Today, USA a company like Yahoo.
I think these companies are going to,
I think you're going to see their stocks appreciate tangibly because out of nowhere they're going to find them get 10,
20, 50, $100 million a year.
I think you're going to start to see a bidding war.
I obviously, everyone's kind of, I think the New York Times is being savvy and kind of playing the reluctant broad.
And it's waiting for someone to come in and make them a big offer to be the exclusive provider
and then sue everybody else that tries to crawl their content.
Yeah, and them now, right?
That's right.
Yeah.
A hearse to Condonast.
The folks that just produce a massive amount of crawlable, you know, high quality data.
So what I mentioned is trying to find kind of the beaten down.
I mean,
you could argue,
you could argue the investment thesis around BuzzFeed's just that,
although I don't know if they have the volume of,
you know, that the 10 things to do on a weekend with your dog in Brooklyn.
I'm not sure that's like amazing.
That's amazing content for the LLMs.
But the bigger players that have struggled to find new revenue sources, this could be a bit of a lifeline.
And think you might see, just being very transparent, I looking at Gannett's stock today.
I used to own some of the debt.
I sold it, but the stock's off substantially over the last five years, it's actually up this year.
here, but I wouldn't be surprised if they announced we have a new deal with anthropic
or something,
and we're going to make $25.50, and then it might go to $100 million, and it's going to be 98 points of gross market.
quintuple their earnings.
Anyways, prediction is that we're going to see some strange and overdue life in the market of kind of mid-tier media companies that have a lot of content that
these LLMs are going to all of a sudden find value in.
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