E110: 2023 Bestie Predictions!
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Are everybody welcome to twenty twenty three? Everybody is well arrested. Ready to take on twenty, twenty three years to month old break?

amazing.

Okay, sexy poll. I know you don't go to, uh, temperatures that are under fifty seven degrees anymore. Have a nice break.

Did you go somewhere warm? yes. Okay, that's a confirmation. Um wow, men of so many words and freeburg .

and over cold weather vacations.

Yeah that does happen at a certain point.

I actually want to fda went to the the free state of fda.

Oh really what's going on a fda at the turn of the new year. I wonder that threw you down to the great state of florida.

Where does freeing IT up in the .

free day of florida?

The fans and.

We have our twenty, twenty three predictions now place some music and all that kind of stuff. Producer nick, at this point.

let's get to IT last year. We know. Do you guys notice every time we talk about something somewhere between sort of two months to a year later, the wall street journal ends up writing a big thing piece about IT think piece about you? So I twisted into the group chat, like last year we all talked about sqa and distributing public equity. Eason, yeah.

How is very fraught, difficult? And then today they write this big article about how people have just burned enormous amounts of billions of dollars that they could have returned to L. P. S. Like these venture investors by not distributing.

That makes sense.

Three weeks ago, when we did enter the year, rap up my big winner for twenty twenty two or the part chops, right? Sit IT down. And today, in wall sty journal, an article, ones that these guys with fifty six billion A U.

M. Over the last two years have made almost forty five billion dollars of revenues. Isn't that incredible?

And this what happens to math? Usually they are these .

guys are just question in city of security did like almost you know seven and a half billion of revenue. I mean, it's unbelievable these businesses how good they are.

yes. So let's get into a this is typical to month. If you think about journalists, they're trying to get into the conversations that are occurring at the bar after the event, the late night conversation, the group chats well.

And that's what this podcast is. It's the exposed back channel, right? And so if you listen to this post, you got the back channel of silicon valley politics, tech science, cetera. So lets do our predictions. In twenty we said our biggest political winner would be a sax and I both said the scientists from a paye and freedom at putting who do we think is our biggest political winner, uh, going forward who do you pick sex, biggest political winner for twenty twenty three who will be your biggest 4 well.

I went a little bit outside the box here because I think we're going to have a gridlock in washington. So not expecting a turn to coming out of washing over the next year. My pick for the biggest political winner is asian american college applicants.

There are two supreme court decisions that the court heard halloween last year. There was a lawsuit against harvard and another lawsuit against un. c.

By a group called students for fair missions and that they maintain that harvard in un c viola tile six of civil rights act uh because asian american applicants are far less likely to be admitted, then simply qualified applicants from other groups and federal courts in boston in north CarOlina or rejected this argument. But the stream court took up the cases. So they kind of went out of their way to hear this. And I think that they are going to .

they're going to repeal relative.

I think the majority will rule to strike down these policies that really discriminate against the asian americans. And I think that the last uh group in amErica where IT seems to be OK to discriminate against, and I think this stream cord is going to is going to find .

that a to have any dogs there. You have brought this up multiple times on the pocket.

Ter last two years, I have said that this was, unfortunately, affirmative action. When I started, I think had very, very good intentions. And I still think that there is a place for IT.

The problem is that these very liberal institutions decided to play judge gary and executioner on which minorities counted in affirmative action. And that's not what the intention was. The intention was to look at the establishment and their ability to get their progne into these incredible schools, even when they didn't deserve to be there.

And so I think this was always an issue of classism that was disguised as racism. And people who are in the upper classes of society have always had an edge. You had the legacy admissions into harvard.

You had people, the kushner's very famous ously, right? Like the five million dollar check from the father that got the son into the school, all of this stuff I thought it's been well written about. And whether or not those things are right isn't the point.

I think the point is that there are folks in emerging lower middle classes who have the potential to crush, and those kids should have a chance. And you can't just decide who those kids are based on the color of their skin. And in this case, what happened was some blacks were still allowed in.

Some instances were lowed in, but asian americans broadly were discriminated. And that was a really stupid outcome. You cannot punish kids for willing to work their ass off. And I think that that was the unfortunate outcome of what a formative action has become by twenty twenty two. So IT is gonna get repealed.

The reason is going to a get repealed is that, you know, we have case law that very clearly states that any institution that accepts federal funds cannot have any form of discrimination. And this is how these folks we've tried to repeal informative action, have taken up this lawsuit. And hopefully the outcome is a more mirror rational system that also tries to create a plurality of different people from different backgrounds .

freeburg adults. And if not, um you're biggest political order .

for twenty twenty. Um my biggest political winner for twenty twenty three is um N B S have been so on. I think that saud radia will have the most important year in kind of the modern era in terms of uh, the role. I don't know you guys saw this voters report from a few weeks ago, but there is kind of a deepening discussion about the oil you want trade in that um saudi would sell oil to china and they will get paid in one sad radia set of the intersection of the united states, russia and china, they have relationships with all three nations.

And in the kind of um conflict and power struggle that is under way, I think that ultimately the direction of where global currency kind of reserves will be taken um and the importance of these great nations and who sets the top, whom can actually be dictated and significantly influence by mbs this year by some of the deals and trades he might put in place in the end of the the kind of partnerships he might forge. I think as a result you will see him kind of rise in terms of influence not in terms of know here the world has accurately for the for the sky but I think in terms of global influence, uh he will rock a chip to kind of the top because of this this kind of uh jackey he can now do between these three great nation states um in defining what's to happen with the U S. And what to happen china wonna currently .

the only thing.

by the way, about your selection is that biden, our explicit stance is unfortunately quite confrontational with ambience. And you saw that play out in q four. We ask them to ease up on open plus to introduce.

Supply cuts, and they did some nominal hundred thousand barel per day cut, didn't do much of anything. There is an article, to your point freeburg, just recently about saudi doubling down on getting the oil out of the ground and monetizing their petrochemicals. So there's just gonna a good of supply in the market, and we have the least amount of influence with saudi abia than we've ever had. And IT seems like we could change that if we decided to. But I think bitten is taken this very confrontational approach, which doesn't seem to make and remember a lot of sense.

the city and intent is to diversify away from oil and into technology and other kind of emerging growth economies. That's why they funded the vision fund. That's why nbs made that big kind of visit the silicon valley a few years ago.

And there is technology that they want to import into satire. ia. They want to have ownership in around the world. And if the U. S.

Is creating a barrier for them to import us tech into sauty or faculty to kind of invest in the U. S. But china, russia have open arms and all they want is for sale to start doing trades and you on it's gonna happen. And I think that's where this guy has um kind of .

a real opportunity to shift the global trump open dialog north china, russia.

N, B, A enemy. You want to .

be able to talk to anybody, and he was able to talk to anybody. Now you also want to be able to say hi, listen. You can't dismember a journalist like to shui.

And you need to be able to have both of those ideas in your head. You can't be rigid and foreign icy. You have to be fluid and keep people at the table. Talking to matho your big political, who do you predict will be the big political winner of twenty twenty three chaos prediction? Everybody.

good. I really like spread trades, right where you go long something and short another. So i'd like to pair my biggest political winner with my biggest political loser for three.

okay? And I am going to focus on the republic lan nomination, and I am going to go long. Nicky hai, and I am going to go short. Ron descendest, now let me see .

you watching sex right now. He ready to interject, go to mother.

So I think that all of this nonsense, for example, in the house speaker race, all of the mid term results, what IT really speaks to our people, are getting exhausted with the lunatic fringes of both parties. That point number one and point so that favours moderates, has an emergent class.

And point number two is that if you look back through many, many cycles of republican and democratic nominations, IT is a very negative thing to be in the leave. So early going into the I occurs in january. And so if you put those two things together, the risk is that descente st.

Decades things emerge. People attacked him because he's the clear front runner. And the opportunity, just like IT, was for trump in sixteen of clinton or for George bush, not herby rocker, but, you know, w is to emerge from the back.

And so if I think about a moderate person who can emerge from the back, who can consolidate the ranks, they should probably be from the south. They will have a lot of these purple compromises that tax mentioned in their policy program, and they will have the history of winning and the history of Normalcy. And so I think that of all of the places where you could ever like the women as president of united states, I think I will come from the republicans.

Before comes from the democrats. I mean, the democrats are unfortunately increasingly judgmental, and I think it's very difficult for a woman to emerge there. But I do think that nicky hai has a shot. So i'm going to go long, nicky hai, and i'm going a short run descente st.

okay, I like in a spread trade for his prediction. Well done. Before a sax to interject, let me just do mine.

And because then you will have to to interrogate, uh, I was looking uh, at biting and trump and thinking, HMM, which one of these is going to have the big win in twenty twenty three years of the two biggest, I think, players? I have a prediction for trump. I think he's going to lose fifty pounds on the olympic. Everybody loves a weight loss story. I think he is going to be indeed by going.

is he on way story he's on the no.

i'm predicting an oceanic run and he's going to draw forty, fifty pounds then we're gonna have a felt trump get invited by garland and the debates and and the and the rigorous with the scentin. I think he's gonna go after the santis based on weighed and hi and then he's going to win the in nomination in twenty four. I am gonna have transverse by IT, but this is a crazy prediction here.

I think we're gonna have a settle ment. I think he's going to agree to not run and get the part in. This is a crazy prediction, I know, but I think he loses the weight.

He wins the num. He gets indeed. And then he gets the Richard nixon parton global party for all of the shit he's done.

sex. You can reply now to these two crazy predictions as predator. My, I mean.

this is like proof positive that everything you have to say about trump's an active projection. I mean, like a emps. I mean, like I think you talking .

about your self for trump strike and he has been oceanic and super god. Yes, both of those things and fasting have you sex on any back?

Yeah, I like that.

yeah. I think everybody should be looking into this. If your, I have way .

issues clear wonder drug. yes. okay. I think that the fifty year launch tude no data on its value is pretty uncompetitive.

Metformin even taken profile action. Ally has shown incredible benefits for silver generation lung, jvc and google's management. And the real of the reality is less to take a step back the american diet.

We are all prediabetic. okay. So let just let just not beat around the bush the way that americans eat and our food supply.

And also problem in western europe is prediabetic. By definition, it's shit, its trash. So mt format makes a lot of sense.

Again, it's on to two data. incredible. But I gotto tell you, the early data on these G, L, P ones are unbelievable.

It's extraordinary. And I can tell from the first time experience, I would lose half a pound a week when I would die IT. nobody. What I think it's just ruck.

It's beyond that. And what i'm talking about, his insulin response, it's a party health. And so if this data tracks like this man, you just want to put everybody on.

I want to do your own research work with your doctors, where there for math for man or empac. But I had great results on IT. I recommend if you're struggling with weight loss like I different many years, you talk to your doctor about IT.

That said, is not a commercial for a gov. example. I M like. So if your question is like, if I could do this for years to lose weight, you know, I think diabetics are on IT for life. So when I made my decision, again, work with your doctors, not random poke castle adventure capitalist, for your health advice, I was like, well, all of these people who have diabetes .

are going on IT for years unless it's on toxic. Go get a renewable al scan. Just make sure absolutely you got predictions you want to respond and I I want the sex to react to my spread trade .

yeah OK so so look, I think if you're going on a batting side, I think that um you could place that bet that your month may pretty cheaply and probably it's like has some good outside IT. I don't criticize IT as a bt. Do I think it's actually going to happen? no.

And I I think the reason is, is this that if you look at what happening right now with the speakers race, there's two very clear wings in republican party. There's establishment wing and then there's kind of this popular managing and the candidate, whoever IT is in twenty four, needs to unite those two wings. And I think this is really the best argument for the scientists, as he's widely accepted by both.

I think nicky hail's problems is that she's very well regarded within the establishment wing of the republican party, but he has no meaningful support within the populist wing, and so I don't think she's capable of bringing the party together, at least at this point of time. He would have to prove that was called a popular bonafides that he just doesn't have right now. So this is why I think you know the santis he doesn't front arrest. You're right that people going keep taking shots with them as long as the front runner but right capable of united party in a way that a despite needs right now as we're seeing with the government carthy thing playing out.

Ah okay, let's go for our biggest losers. Uh will rip through this last year I said biden and trump s in the extremes chmagh said the progression of bath against the stream. Sx said policy who just wrapped up her tenure and freeburg said U.

S. Influence globally with the biggest political loser ah let's get our predictions for the biggest political loser of twenty twenty three freebies. Who do you think would be the biggest political loser of twenty twenty three? The world wants in everything.

I would continue my U S. In late, but I I am gonna shift. Here's what I thinks gona happen this year.

My my big prediction is .

based on um I think the world has too much debt. I think that the economic slowdown coupled with rising interest rates globally and a and a dirt of uh kind of asset uh capital inflows, means that there is gonna lot of issues with the number of dead markets around the world, particularly kind of emerging server and dead.

Just to give you guys a sense, global debt is about two hundred or and thirty five trillion dollars in public and private um you know that somewhere between five and fifty and trillion dollars of interest payments a year depending on what the net rates on ninety six trillion dollar global G D. P. And there's another trillion and a half of unfunded liabilities in the U S.

And pension and social security. I think this is the year where a lot of the dead market start to unravel. The party entity that steps in for a political i'm going to tell IT one second political yeah so the political ramifications so the political ramifications for me, I think that the um the entity that steps to try and support these um unwinding is the I M F.

And I think that no matter what the I M F does they're onna look bad. I think that you know it's sort of like like zero power this this past year, right? Like you raise rates too, let you raise rates too quickly no matter what you do. IT has some adverse effect and impact. It's either inflationary or order impacts growth.

And so I think the I M F, uh, is going to a lot of heat, brother, or acting not too soon, uh, sorry, not fast enough, or uh or acting to aggressively and causing inflation, uh, as a bunch of these markets face credit risk, uh, this year. So my big bet is the I M F is going to play a major role and we're going to be talking a lot about the M F later this year. I I think as a result, the I M F will get a lot of heat, and you will end up seeing a lot of pressure and political, just like we blame to, just like we blame different people, the fed will end up blaming the I M F for a bunch of problems, and that will arise.

But the natural physics of what's going on is the world have too much debt and not enough growth to cover the debt, because the dead, that's IT OK. And the I M F will be the political kind of, you know, hit a result. You have a point of view but I think.

yeah and who do you have, uh, as your biggest player loser prediction for twenty twenty three, mister David acx?

Well, I mean, Kevin carty now survive the week. So let me go a different direction. I think california is my big political loser, and I would say, in particular, of the city of the Francisco, both.

Are you going to have gigantic budget shortfalls? You may remember that this is back in twenty twenty one when we had that asset bubble. California had a surplus of seventy six billion, and then IT insane.

And then twenty twenty two happened. And now the day is looking at a twenty four billion dollar deficit. Well, if we had taken, say, a third of that surplus from twenty one and put them in a rain day fund, we were enough to worry about this deficit.

But that was never done. Newson started handing that money out like Candy to the electorate to goes like has reelect numbers and to get in past the that recall, remember? So the state never got a cisco outlook in order.

And now I think it's going to be even worse in twenty, twenty three and a seven years. Go the city, very simple kind of problem where it's tax places is heavily dependent on commercial real state, which is really suffering. So you know the cats service to go in the state, california the'd moved their tax space to to highly volatile capital gains. And with a really lousy stock market, I don't know how these guys going to to meet their budgets.

So a lot of people can be a lot of austerity in pain coming for sure. And these people do not know how to manage a budget. The incompetent. So you say california freeburg, as I am math, who do you think the bigger political loser for twenty, twenty three will be good? And i'm an aligning with you.

I think the sentience peak a little too early, and the forever trump ers, and in the chaos is going to be a little too much for him to handle. Okay, now we get into what everybody wants. Business, business, business.

Biggest business winner for twenty, twenty three. Who do you have to mah for your bigger biggest business winner? Twenty, twenty?

I'm going to pick something out of my portfolio. I think i'm the only non trivial ly large investor in both space sex and relativity space. Relativity space has a huge space.

Sex is clearly just crushing on all cylinders, and they're really the only game in town with respect to launch capability. And if you just google IT, you'll see that the europeans you know have a hit miss capability and launch. The russians are completely unable to do launch.

Now because of all of these sanctions, the private companies in new zealand or the united states have also had fits and starts really incapable relativity, which is really, which is now the second most highly valued space business, is about to do a launch in the third week of january. And the big difference between IT and space sex, which is sort of why we did IT. This is a early Y.

C company. I did the series a and kind of went along the whole way. They have three d printed everything.

And the reason why three d printing is interesting is you take a, so if if you think a rocket costs five billion dollars, is built by NASA, elan was able to take that to a hundred to five hundred million. And if you three d print everything, you can take that cost to like five to fifty million. And so IT allows you to just have this repeatability in manufacturing business.

Now SpaceX also has a lot of three printed parts, but relativists entirely three printed IT has lunch in three weeks. I'd keep an area, I think, and we have like a ten billion dollar order book that gets unlocked. So I don't know how to see beyond a lot of these market forecasts right now.

So i'd rather pick a company. I'll pick something, my portfolio. If the rocket does not blow up, there's a tempt a dollar order book. And this company is now on trajectory to be as valued .

as the good times.

Go to zero freeburg .

go head and talk your book times two or three. Lets see if you can one up to out which one of your investments will be the biggest business winner of twenty twenty three.

three book on on investor. My big bed is OpenAI. It's just wait too obvious to be anything else this year.

As you guys know, there are dozens of startups s that are being started right now based on an open a eyes demonstration of dolly and h ChatGPT. I think we're seeing this in the enterprise and consumer markets. I think open eye will become, uh, to some degree, maybe they could be so many pas.

They could take the A, W S, providing tooling and infrastructures. All these startups are building applications for consumers and and business users or they will end up doing a massive deal with microsoft. I think inevitable they are going to a billion or plus investment this year.

They could power, you know, A I driven being search and voice driven search. They could build their own products and their own tools and their becoming great investors as they invested in descript, which is a product company we use here for our podcast, which is an incredible product. And I think the same open is a very smart and ensure investor as well. So for a lot of reasons, I think open a eye could end up having an amazing year this year and a lot of different path I could walk. And we're going to come out this year and say there are one of the top companies in the way.

okay, sax OpenAI e has, of course, uh, increase your ability to talk to other humans. So you're seeing a lot of big winds there. I know, is how do I talk to a child about to their college hopes, aspirations?

No, no. know. How do I talk to H, D, about their day?

Hello, litter. Hello, hello, progeny of mine. How are you faring today .

in this complicated me, a script of talking to a twelve year old about their homes and dreams?

Interest using GPT for talking points on different topics should try .

that for the power.

Do you know we be shot on .

the GPT predictions? The GPT answered as a part on the speakum. How do ChatGPT and you know your treatment of your condition?

And let let me get my answer here OK. Um my answer for the big business winner of the year is america's natural gas industry. Yeah I have to admit this is an aspect of the ukraine war that I didn't fully appreciate until I read this new york times the article the other day about how natural gas Prices in europe have now fall into the level there at before the war.

And everyone thought that would be this huge shortage, and they would be to heat their homes. Well, what happened? The the answer is that europe completely cut off their dependence on russian gas.

And in fact, the north in pipelines were blown up. So physically they separated. But then on top of IT, they basically started importing liquefied natural gas from the us.

And here's the key paragraph in this article from the york times is that europe rapidly built terminals to receive liquefied gas, sweeping away many of the usual biocon tic obstacles and environmental objections. So in other words, Normally would have taken decades to get approvals, now was all put on a fast track. And europe is now completely dependent on american natural gas.

And I think this is the, again, the thing maybe I interested mated. The cold, hard american interest in this war is basically turned europe into a vessel of america's natural gas induction. Previously, they were about to be dependent on russia, and north stream was going to make that situation permanent.

You know, somebody blew up north stream. Now they are dependent on american L. N. G. They're going to pay higher Prices for that.

But it's it's been a pretty impressive win for the american natural gas in the stream. I think biden has really pulled at one eighty here because you remember when he first came into office, he canceled keystone. He cancelled drilling.

He was very tough on the oil and gas industry, I think after he then delivered the hundreds of billions for the climate special interest in the inflation reduction act. Now he is taking care of the old and gas industry. I one by yeah that.

And so what you're saying is bite in dynamically change course based on inputs like a great leader. Wood, okay, well done.

I don't. I don't listen. I, well, no, listen, I think, and has done something politely smart or question about that. I am giving him reddit.

Does that mean that this war was worth at? No, I know I really which be engaging in oil wars like we did in the release. So i'm not justifying this war, but I am saying that there is a cold, hard american interest underground.

The, uh, our position, which is it's about L N G. It's it's not just about moral production. Des.

yeah I am strong. Start to twenty twenty three vessel and underground.

Um my biggest predictions, I am working backwards from two here. I think the dordick, airbnb, uber ecs of the world who need entrepreneur s they need workers, they need supply theyve always been supply constrained. As unemployment becomes, let's call what IT is sticky.

You're going to see a lot more people participating in gig platform or entrepreneur platforms that enables them to make money. So I think they will be huge beneficiaries, especially if they continue to lay off employees like doorstep and are being bided to write size their business. But my first one, my number one, is laid off tech workers.

I think layoff tech workers who a get together in groups of two, three or four uh, developers, product managers, people who actually build stuff and start companies together are going to become extremely successful. And you're going to make incredible lemonade from these lemons of these big tech way of writing to start up space is in these little of tech workers who choose to take control the destiny and starts. Companies are going to be the true big winners if you do IT do IT with two or three friends, because you're going to need developers, you're going to need those.

Those towns of people in the startups that have three founders get funded faster than the ones with one. Uh, so those are my two winners. All right, oh yeah.

Last year our biggest business winners were chaotic S N B, sexy rise of the rest freeburg such tripe. And I said, disney millennial, let's go on to biggest business loser for twenty twenty three freeburg. Who do you think we'll be the biggest business loser in twenty three this year.

in fact? okay. So my biggest loser is the general category of capital intensive series b 3d growth businesses in the landscape， private companies. Um as you guys know, there's been a big shift in capital allocation.

A lot of the folks who were riding big checks into growth rounds are retreating back to writing smaller checks and see in a round, they don't want to write the twenty million dollar series b. They want to write the five million dollars seat in a around h. No one wants to kind of follow evaluation.

No one wants to set the valuation for these growth businesses, particularly if after this round, you know you need another big ground of capital and no one sure if someone's going to be waiting on the other end. As a result, we're seeing tons of these businesses run into capital confusion walls. They can pave IT.

I think we'll see what we saw, the dot com bubble, where ninety nine and a half percent of these companies actually die, the half percent that we are going to emerge as the next hundred billion dolente prises, the google and the amazons of the world. So there will be light at the end of the tunnel for the winners. But generally, there are hundreds of companies in hardware, in syn bio, in biotech and high growth enter Price, a software that require significant sales investment expense.

A lot of these businesses were the capital intensive nature or the business just doesn't have the market for the right now. Uh and are are all retreating and going be. So that's what I think this can be more kind, by the way.

See an investing hot is a button uh bet that yeah that's IT. okay. Sex, biggest business .

loser for twenty, twenty three well, I just, by the way.

one hundred thousand years, freeman said. But my biggest loser for business and twenty three is the consumer. I just don't understand how the consumer isn't gna finally tap out in this economy. I mean, they they have a mountain of personal debt, credit card deaths at all time hires. I think the average credit card break hit nineteen point six percent last week and expected to rise even further.

Uh, the mortgage rates are about seven percent now to forget about trying to buy a new home or sell your home and your stock portfolios down to and now layoff s we're starting to pile up. So I just don't understand how we're going to wait a recession. And you saw you know cash Carry saying that the feds going to keep raising five point four percent.

This prediction. I don't understand how if if rates are at five half percent, that doesn't finally break the back to this economy. And we go into .

think acts, that economy is actually broken right now. We just don't have the data because the data lag 6。 In most people's minds, because IT does feel like the consumer is just and real state has just broken at this very moment.

IT seems like, I mean, the pain is very unequal, right? But in the tech industry, we've been in a recession for a year. I mean, like the gross dogs are down eighty percent where freeburg said is true.

No, it's gonna und these high burning companies. There's an enormous amount of retooling that has to happen. Look, I think the recession is here is just very unequally distributed, distributed exactly.

yeah. Mean, if you look at IT h by now pay later, that's a category starting to break credit card debt. I should saying hitting you know uh big um a bad records in terms of how much we love spending.

Also, people's say things are going down, so the consumers back has been broken. I think we're just going to feel IT in the in the first second quarter to math. We are biggest business loser prediction for twenty, twenty three.

The world wants to know. Let me just build on what freeburg and sax said for second before I give you my pick. sure. I know this is the conversation you and I had when we just got on guys. What I was telling jl is at the end of q four, I did five deals and four were parada as one was a new deal and they were all clean, Marcus.

So the four deals that other people put money into, and I was looking at them, and I was try to figure out, okay, what difference shades these things in? Revert to your point, these were super cleaning startups with very clean cap tables that had clear progress. And then conversely, I had seven converts showed to me for companies whose valuations for anywhere between three and, I would say, twelve billion, and I did none of them.

And not only did I do none of them, nobody else did any of them. And the problem was the real market clearing Price was eighty and ninety percent down. And so I was like, what is going on here? So favor, to your point, I don't even think she's cash intensive startups.

I think it's like all growth companies are in a really bad place. I thought that this growth stuff would get sorted out in two to three months, and now i'm ready at two to three years. I think .

it's music toxic. Here's the definition to math. What what I think has happened and what I think the cut off is, is when evaluate the imployed market valuation of the company based on where public concept trading is less than the total capital preference in the company, that the total preferred stock and there so many companies now that raised four hundred million of two billion valuation, but the company is actually worth three hundred million now based on public market comes so they're worth less than their preference stack.

So are capital no, that this is why I think all these converts are getting done.

That's where the rober meets the road on all these deals.

Yeah that's track who does the convert benefit? The convert benefits, the V, C S, who wanted maintain the elusive valuation that they had before they do that. They do that to a switch, the limited partner who gave the money that the Marks aren't as bad as they thought, but the people that really gets growed, as Jason said, of the common shareholders, because eventually those converts deals that do get done, those people will end up boning the company. The captain gets completely flushed and reset and the employees get wiped up.

yeah. And then you got to basically take all the employees who were they are previously, who now hate the founder, and you got to stand over and give everybody all the other.

wiped the people to do all the work at fuck, and the people to do none of the work, and who just want to maintain this shell game, gets to basically live another day.

Basically, people are investing, as you gave in the example earlier, like he is a three billion dollar, but it's actually works. Seven fifty people, instead of taking the valuation from three billion to seven fifty, say, okay, buy one share at the three billion dollar Price and we'll give you three or four shares for three or four panny warrants their calls typically, or you know the different ways to structure this. And then of a sudden, nobody knows the actual dominator. They may own ten thousand shares, but they don't know how many shares are actually issued because the warrants are not on the capable there in some side doors and folder yer or cfs office.

So let me let me tell you my biggest business loser.

yes, please.

I think that the biggest potential business loser this year is google search as measured by star profitability and engagement. I think it's easier for me to see where the the usage comes from as opposed to picking OpenAI or ChatGPT in terms of where the usage goes to. And the reason is because I think a lot of people don't still fully understand how machine learning A I work.

But just thirty second primer, there's two big buckets of work. There is what's called learning, which is how you learn how to make predictions. And then there's what's called inference, which is when you add, you type something into the search box, you get the answer, the thing with learning, and what ChatGPT is showing, is that they have learned by crawling the entirety of the web.

There are five or six other organizations that are capable of crawling the entire web in terms of costs, in terms of compute, in terms of the quality of the transformers and the quality of the AI. And so I find IT easier to predict the decay in the quality of google search, as that much Better than everybody else than I find IT is to predict to a win. Because I think that with enough time and money, oracle, microsoft, google, the chinese internet companies can all compete facebook.

And so I think that you'll converge on the same training, which will lead to the same inference. And so I think consumers end up getting confused and will end up being able to get high quality search results for many places of today. You know, you can only think that google is the only game in town, quite honest for most people. So I think that the google could lose ten or fifteen percent of usage to all these other sites. And that may not make any of those sites that relevant, but IT allow a material measurable impact to google and google .

and fantastic prediction. And I think you know charge pity of other ones. You're going to have a very interesting marketing attack that they can do on google is why search when you can get an answer, right? Hey, what? Just give you the answer you don't have to search. I had so many losers that I went through here. I'm just going to run backwards to the number five, I thought founders .

refused to downsized in .

twenty twenty two could be big losers. Number four, I thought VC funds founded in twenty twenty. Then I thought a crypto is gary against SaaS stock.

Then I went with you to a number google. My god, they ve got so many headwinds against them with a ChatGPT. But I wound up on why colour work with no heart skills.

Twitter going down to, I think, you know, you can set a couple of hundred people's all you need to run twitter and think he said he has two thousand employees or something like that. He has shown everybody, you know, hey, listen, these more can be done with less, or these things are overstated, ed, in a massive way. I think why call the worker is now the idea that you're going to have four offers and you going to able to play .

them off each other is over relates to surprise.

sure. Why call workers A K A surprise? People actually you know are mid managers who don't who don't actually code or don't actually build a product or sell product, don't actually do real work as as I think um many people who frame IT in the manager of class or the CEO class man, they're going to have a hard time.

And this week, andy, amazon, andy cut eighteen thousand White collar workers, not the blue color, the White collar workers. And amazon, that was a big turning point and bending off. You know he's ohana, he is maho.

He is uh a oha. He does not like lay people off. He considers sales force a family head .

laid off eight thousand.

And yeah and I mean that about that well.

I mean the reasons pretty simple, right? Their gross slow down by two thirds the most recent quarter, but they are still spring the same amount of sales and marketing. So when that happens, your cat payback explodes, right? You go from three years, pay back like ten years. So they have to cut costs in order to rationalized their unique conomo s so and now IT cascajo. Because all of sales forces, vendors are going to getting less money from sales force, they're tighten their belts because then those companies are going have to cut and the cycle this keeps going and go in.

right? And everybody tightens their bets at the same time, freezes the economy, A K A recession and and possibly so what is this is little ted in twenty twenty two just say no um I picked cyp to freeburg also picked cypher cha VISA master card and sex said assets classes that benefit from government a dumps and and good yeah right let's go to biggest business deal of twenty twenty three years, a prediction what .

we think could .

be the biggest starlink .

will go public. H space will cut and pace the captain and we will take yum IT will be yummy and delicious. And my prediction is that the starling valuation will be at least half of space sexes. Current private mars, seventy five billion, just five billion IT will be phenomenal.

And I think the reason why is that I think in order for you on to have complete financial flexibility and do what he needs to do when you know he talked about this on our pod, about the difficulties and the dangers of margin loans and all of that stuff, yes, he's gonna create breathing room for himself. This is the simplest and most obviously, from to do IT. It'll give him a ton of more dry powder.

sure. So I think that this is an obvious outcome. Twenty.

they already have a million subscribers in there, Better than nothing beta as they call IT. I have two of them. I think, uh, this is a great, great.

I was the, I was the first one together for for the global seventy five hundred.

So okay I I got IT for yeah 发 好像 yeah 什么 there in your .

house in the same .

yes exactly。 So now you go there is a point of people are underestimating the time, I think of this product. The team is not existing broadband connections, its second connections, it's connections .

where connections didn't exist is the best in class. The best in class broadband connection for a plane is called ka band and IT costs five hundred grand year, and you can replace IT for, you know, attention of the cost and starting on a plane is dramatically Better. By directionally. So I think starting link is going to go public, and I think it's going to be bear it's going to be the best chance that we have of opening up the capital markets in two is .

another way of saying people who want private jets, if they are flying two hundred fifty hours a year, which probably be a reasonable number, two, three hundred dollars a year, they are painting two thousand dollars an hour for the international service. That is bonkers. Okay, sax, who is your a big deal, biggest business deal, a prediction .

for twenty twenty deal, twenty three prediction is there will be a deal between a putin and g and they met by satellite late last week to discuss ways to further help each other in twenty twenty three, who, and characterized as a no limits partnership. You may remember that the two of them inked one hundred and twenty five billion dollars as deal in early february last year. That was three weeks before putin invaded ukraine.

I think now russia is even more dependent on china. We've really driven russia into china's arms. And I think there will be a big deal not just on energy, but on agricultural products, mineral products and rare earth minerals that most likes to talk about. I think there could be a trillion dollar deal between russian china this year for us. We go the limited prediction.

okay. So there is your twenty twenty three prediction of the biggest deal, the legion of dictators forming I do think it's IT is like, know that the access of you a listen more religion of dictor okay, let's do business together. Free berg, you got a prediction for the biggest business deals. Twenty, twenty three.

this is really going on a lime here. I do too real quick. The first was the similar work, sax said. But it's. Kind of echoing what I said earlier, which is the petrol you on trade. I think that the saudi, china trade, if this happens and oil is sold in you on IT Marks the beginning of I think um the end of the assumption that the U S. Dollar is the global reserve and the risk free currency in reserve for the world.

So I think the petrol you want trade you guys um here's the voters article covering js visit uh to study radio last month, the first second week, december once this gets inked and signed, it's a real shift uh, globally. I think the other one that that i'm at a point out that I think is a bit of a out of left field one maybe and maybe i'm just going to look like a total at the end of the year. And this is my wild art and my wild card.

I think apple ends up buying something completely out of the ordinary. And here is why I think apple le's core business, they are facing significant pressure with respected the relationship I entice to china, as you guys may have seen last week, fox cut announced that they're actually going, uh, further downs am in terms of their production model. And they are trying to diversify away from being kind of the sole service provider to apple.

Apple, as you know, is under such pressure to get out of china politically that they started to try and invigorate activity in vietnamese. So a lot of pressure on the relationship with their low cost producer and low cost production partner. There are also under a lot of political pressure because of the APP store revenues.

You guys know the thirty percent APP store the the batik uh lot of people are calling him oppol tic and anti trust is getting involved to their fears. That pressure there is also the pressure with respect to the you know waiting uh, consumer demand for high and electronics. Samsung last yesterday or last weekend or yesterday, I think, announced significant declines in consumer demand for electronics or their forecasts as such, that has to impact apple as well.

So when you put all of this together, right, they're being pressured to get out other low cost manufacturing center. They are being pressured to stop making money on the APP store. They're being pressured because the demand may be wanting.

They have to do something big to kind of diversify the business. So I think they might end up doing something like buying a real content company. Maybe they do something like buy a disney.

Maybe they do something like buy an automotive company like, uh fir chrysler R I think there are a number of these kind of like what may seem today, outrageous deals that apple might end up kind of being pressured into doing so they can get ahead of their forecast of the impact of all these pressures are gonna on their core business. And so I think this is something interesting to kind of think may happen this year. I certainly have no insight or intel them on anything or I could be completely wrong on this one, but he feels like they've got to do something this year.

I to keep that business is I think you I love your wild card because the M, B, S, china trade and that relationship, sure, region of dictators. But this one is really good. It's hard to buy disney monopolistic c issues, but buying a car company pretty easy because that's a fragmented market.

I love this prediction. I mean, now a tesla with this depress stock Price. Apple could make a run.

A tesla have they almost buy with cash, let alone B, M, W, volvo, one of those brands, they could buy easily. What a great prediction for me. The prediction is amazon's three legged school grows into a third chair, chair with a fourth pillar. For those folks who are not familiar with how amazon has built their businesses, there are three pillars in their school.

E commerce, obviously, when you buy stuff prime memberships, which is kind of consider a separate revenue stream and of course, AWS cloud computing, I think the forth is going to be this continuation of following the health stream, not advertising because that's not a consumer base product that just the way they make money, health is gonna a big one for them. Uh, they obvious ly acquired one medical, which was a small purchase. I think they're going to buy roman s.

They're gona buy pallet on. They could buy a woop and they're going to go all in on health and know that three legs still becomes a very study chair. And my runner up is tiktok is gonna divest under the rest?

I think that it's going to have to go public and the chinese are going to diva's their interest in IT uh and just take their chips because they're na be face with the existence al threat. During the political debates of the next two years, there will be anonymous support from democrats and republicans to get tiktok out of the U. S. Therefore, they divest. Can I just test that .

which with you guys because we have talked about this a lot, that, hey, we're going to be an tiktok. How many of your friends kids or your kids do you guys know spend hours a week on tiktok lot? How do you get over the political mountain of trying to ban tiktok? If you try and ban tiktok, whoever raises their hand as we should ban, tiktok actually gets IT done. They're out of office. There is gonna so much pressure and backlash because people are hoped and love that APP and use IT all the time .

to take that away from people Young. Don't phones like everything that talk tube shorts. So I don't think tiktok is that important because IT IT is not actually there is no sticky network effect inside that APP.

So there isn't usage that's dependent on people, you know or a graph that you build. It's a lot of passively consume content. And so you know you're you're getting pushed.

A lot of l algorithm define content. You can do that on youtube. And so I actually don't think it's that meaningful, important if tiktok goes away. I think the content created state, it's harder for them to build a business on youtube shorts. But if you look at the measure, the density of content inside tiktok, IT exists the most .

want to want on youtube. That's .

interesting interest. You think if we can still take talk in the U.

S. And can you but people will just go to youtube, instagram. It's not that big, al.

In fact, a lot of the my favorites, if there is a network effect inside there, then I think people would have a reason to complain to somebody, whether it's you're representative or whether it's somebody else to say, hey, don't do this, this would happen. Deleterious impact on my quality of life for my quality of experience. And you could make that clear claim on instagram, facebook, you know, google, youtube.

But tiktok is is much more brittle that way. And that's why they need to get public sooner. And monetizes bloody thing because I think that it's very easy actually to deconstruct tiktok value into these other places. I can tell you my favorite .

tiktok is chef's reactions. And I consume him now in instagram because he post, we just copies one to the other.

So chapter reaction is a great example where he actually got banned by tiktok and then diversified on a zone. And now what he does is he publishes across multiple streams. And if you look at all the big creators, they all do that because that makes no sense to actually give the power to any one of these things. Why have a dependency? Why a defendant?

Or right, let's keep the trains moving. Most contrarian belief. This is the Peter til award your chest partner sex, who's winning in twenty twenty two? And chess, how many chess games do you have going with Peter tail right now? And who's higher? You demolish me with your queens gambit.

I played one game that killed in seven moves. I'm ranked at eight hundred and nine hundred right now, sexes at eighteen hundred. And just walloped to me who's higher rating right now?

You are peared to accept .

I just I don't even know what I was. I like what opening is this. You are like campet your dead in queens.

You don't accept the queens campet very pleasant game for White. I'm going to go on a limit a you know and risking wrong um my my predict or most contrarian belief is that the romance between biden and zen ski comes to an end at some point in twenty twenty three and let me state that the park that I think is conventional wisdom and everyone agrees with, which is there can be a massive ukrainian counteroffensive in the spring.

And I think that could go one of two ways. Either IT could make limited gains racially, the russians fight them to a staal mate. Or IT could be successful, and they could basically push the russians back to the three twenty third lines and make a play for crimea.

I predict that in either one of those circumstances, the lindsey's interest and violence interest, i'll start to diverge. So in the case of a stale ate, which I think is probably fifty fifty here, bias gotta start going into election mode for twenty twenty four. And I think we're saying they were going to be in a recession.

So I think that if there's A A stale may I think, bites gonna tell slash, I wrapped this thing up, is time to negotiate. We need to get this over with. By the same token, if the account offence is successful, I think that the administration, hopefully cooler heads will prevail and not let them take crimea.

That's specially what they're gunning for is they not only want to get back to the three twenty third lines, they want to go already back to the two thousand fourteen lines of retaken crimea. I think that's extremely dangerous. I think that could precipitate a nuclear war.

And I think that the cooler heads, the administration will tell linski to stand down, and that's the right time to make a deal. So I think and either one of these scenarios, I think you will start to see a divergence between the ukraine and the american interest. And I could create a rist, and I don't think no one's really predicting that.

I I think this great. This is kind of what I thought the plan or all along was, which was to deplete, putting resources, distract him and then, uh, get the west off of his oil and and and try to do regime change, but do IT by bleeding him. This would be uh, proposition of that strategy, which is bleed into the end and then cell lin skye, I think that's actually I know I know it's cynical, but I think that's what we're doing. I think ukraine is a tool to deplete pun and then maybe get a regime change. Cynical as IT gets with this tramp, which are most contrarian belief of twenty twenty three.

I will go and pick that inflation, which people expect to fall off a Cliff, doesn't fall off a Cliff is fast or as meaningfully as people want. And so I will explain inflation as. Three different chapters, and we've seen the first two chapters play out.

So twenty, twenty one chapter one was all about energy inflation. And you know, we all talked about having almost ten dollar gas at the pump. And what does that mean for everybody? And IT caused that initial Spike in inflation.

And then we had to come off, and sex called this. He said, you know, we're going to have this sort of double hump. And twenty twenty two was really the story of goods inflation, right? All these Prices in all of these things went up because the input costs went up, and we all had to bear the implications of that.

But then that started to eb. Now if you looked at the tail end of twenty twenty two, what I found super interesting was the number of articles I saw about wage inflation, whether that was biden using an eighteen hundred year law to prevent a railroad strike, the number of states that increased minimum wage, the trend round unionization. So in general, my thought is that the pendulum swinging very markedly away from capital and towards labor.

And as the labor participation rate stays low and continues to go down and also is compounded by an unemployment rate that may go up, right, people, it's going to be harder and harder to get people to do the work you need at the company you have unless you pay them more. And if that gets exaggerated, the inflation will stay where IT is. IT won't be as muted and IT won't fall all of a Cliff as people want to be persistent. That's my big contrarian. Got wager for this years that we inflation we see wage inflation that keeps inflation not going down as much as people.

This is continue because everybody saying, hey, it's over. The consumers back has been broken, the credit card dead is high and everybody is being laid off adia ta. Therefore, goods and services there will be more supply than demand and the Prices will lower. Very contrarian freely given citi an belief for two .

and twenty three. I think my IT follows my earlier points about the sauty china, russia, russia. Trade this year twenty, twenty, twenty three.

IT may be the case that you there's historically business belief and is continuing belief that the U. S. Dollar will always be the defect of global reserve.

And the current mantra is that is Better than the rest. Everyone else is worth often than the U. S. Western europeans in trouble, japanese in trouble, china's in trouble, everyone's in trouble. But if there is a coalition, an economic coalition, a scale economic coalition, that starts to shift the baLance of power a little bit, and the U. S.

Meanwhile, is taking on extraordinary debt load, spending one point seven trillion dollars in an oma bus bill, you know, has this massive unfunded social security problem coming down the pipe, and or try to manage multiple funded conflicts around the world. IT could be that the U. S.

Dollar coming out of twenty twenty three starts to trade more like a risk asset and less like a risk free asset. And so I think that that's my big contrarian bet, is that maybe this year reMarks the beginning of the end of the U. S. Dollar as the kind of global defector reserve currency based on some of these big trades that I talked about happening. So that would be my my big kind of contrarian .

perfectly said that you're contrary about the act, the legion of dictor B, S, S, A. They become, they form a new global currently. Yes.

I would a lesion of dictators and I won't form a new global currency. But I do think that the fact that, that large economic .

trading models start .

to be done in non dollar dominated form, got you know, weekends, the the kind of reserve status of the dollar, to some degree, not fully right. IT doesn't happen in a binary way. And then the dollar starts to trade more like risk set, like other currencies due to some degree, not fully. So maybe maybe this year we start to see that shift .

once going to take the exact opposite of your contrary belief, I believe american exceptionalism continues to sore as russia, china, saudi, arable to a lesser extent, continue to self sabotage themselves with insane wars like putin has done. Or cutting off uh, the heads of entrepreneurs in china figure timely um i'm saying here, uh I think you cannot have exception nale m without entrepreneurs, without people having freedom.

And I think that means american exceptionalism based on freedom is going to continue. And the region of dictators, I believe, are gonna step each other in the back before they change the world or move the currency, can trust them, y'll snip at each other and all the service. Actually, you fall on our opposite.

I think that amErica is really feeling its weeds right now. I think that american power is immense. I think that the superiority of our weapons in ukraine spent one of the big surprises of the war.

Let's go. pa. lucky. I don't see the world in the sim mp lisc. Good guys for the bad guys frame that jab does. However, amErica is on turbo right now.

And yes, IT is true that the bricks would love to get off of the dollar because we are now using the dollar in the financial system is swift as a as a geopolitical tool and a weapon. And they would very much like to be off of our dependence on our currency. But I don't think they're anywhere close able to do that yet.

And like I said, amErica is on turbo right now. Now thing thing I wanted mention this is came out White house correspondent and gentle for Jacobs just reported that the us. Has agreed to send broadly armed vehicles basing our best tanks to ukraine.

Previously, U. S. Officials had blocked at sending armored vehicles, saying heavier weapons be too difficile for ukraine to Operate a maintained by allies moving to provide such weapons.

So we keep providing ukrainians with more, more sophisticated weapons, more, more support. Like I said, this is leading up to a huge ukrainian counteroffensive in the spring, and I really don't know what's going to happen at that point. I do think that the russians will escalate.

I don't think they can afford to lose this war you've viewed as existent, al. And I, like I said, I hope cooler heads will prevail. And if the ukrainians are successful breaking through, I hope that the bind administration will shut this down before they try to retake crimea.

Because, you know, we have discuss this before, I think the russians confront him with a choice between a total defeat that includes losing crimea, their naval bases of a stop, and seize the ukrainian flag flying over their bed at seven a topal. If if that's a choice stream that or potentially using a tackle nuke, maybe the mouth of the crimean penal as a firewall, I think they could choose the nuke option. So um it's a very dangerous situation and um you very, very dynamic there. A lot of possibilities. All right.

let's go on to best performing asset of twenty, twenty, twenty three, ongoing with sea stage investing. Again, I don't think people want to get into these toxic, capable ables at late stage, I am off, pointed out. So I go with seed stage.

You know enough to series a, the people brave enough to play bets, the founder brave enough to start companies. I believe it's the best performing. I I like class twenty.

I think that there's still a lot of uncertainty in the world and in the markets. And so i'm generally concerned that there's a lot of chop. And so I pick something that's pretty conservative, but I would have a combination of cash and the front end of the yellow curve. So tea bills all the way up to two your bones, so you can generate four and a half, probably by the end of this year, five percent pretty safely owning the stuff while you wait for things to become more certain.

And the way that I think about IT is that I would rather miss the first ten or fifteen percent of a rally once we're really done this stuff, then try to over correct and try to pick a bottom just because I think that you could lose a lot of money. So I think the goal for this year is to stay resilient in the game. And so earning, having a bunch of cash on the sideline, ready, pounded in. Meanwhile, a portion of IT collecting five percent is not such a bad thing while you wait for the bottom fanton.

My answer was actually very, very similar, which is if cash car is right, that rates are going to five point four percent in q one. Why when you just put all your money in short term tables so you earn five five and hf percent risk free yeah like set IT and forget IT yeah and that's why couple flows are moving hugely right now from equities into bonds, especially for going to a recession, which is .

inherently deflationary, where you got bird forming as a classic onic with three.

one of the things. So I think it's inevitable that we continue to have a significant infrastructure spending from both the stimulus and security point of view. So you know, we can't want to continue to stimulate the economy and and support growth.

We want to continue to create jobs and support this transition. In the if if the recession predictions play out true and the job market does loser is very tight right now, um there's going to be even more than impedes to continue to do infrastructure investment. But I think there is also these big economic transitions happening under way right now with uh pharmaceuticals, with uh semicon, on doctors, with energy.

There's a lot that we've talked about where there's a security problem and the redundancy problem. And so you know the couple of waves to kind of play this infrastructure spending pieces in each of those areas, i've kind of highlighted four of them. One is in semiconductor capital equipment, okay, I can call apply materials that that that range of businesses that provide and sell the equipment into the um the fads and the and the the organizations that build semi cannot to manufacturing facilities.

The second is kind of an oil and gas services are similar to what sex said earlier or slumber ja Baker hues. That classic businesses, I think, benefit in this in this environment. And this is independent of kind of economic condition, certainly because these are big uh, multiyear spending projects.

The third is in the the equipment to support them. So dear and caterpillars. And then the four, I think is an important one. I'll talk about this in a minute with respect to my biggest kind of anticipated thing for next year, which is in a pharmacy al infrastructure.

So thermosphere and there's some company and others like them ah because there's a lot of build that happening to support these big transitions happening in the modalities that are being used h in pharmacy al drugs and diagnostics. And then I think that, uh, there is also a couple of these businesses that are diversified like banana r honeywell firm officials, a good example. That play across multiple of these um these opportunity.

So those are those are all great businesses to own. And you don't need to worry about you know that the growing cash for positive divided pain companies and you don't need to worry about, you know, I am I getting five percent or five and hf percent based on the equity Price this year. These are long range businesses that are building real value, growing their top line and compounding value from within.

And then they requiring a lot of smaller business is very cheap. I'll say what is an important trend i've seen across these companies. Honey official, they buy small companies.

They pay very little, and they immediately get massive return on invested capital like the, the, the high teens. So why get five percent on t bills when you can get high teens? R, Y, C, A, the management teams running these incredible platforms. So that's where I I most excited .

for this year. Okay, now let's move on.

I was like, that was like A D that was like, mad, mad money. And I ve never been seen before.

You get got worse performing asset. I went with energy because not that I think is not important, but I just feels like everybody rushed into IT in twenty twenty two. So he feels like it's overheated.

And if we are in a recession, might lower consumption, uh, in terms of energy and be looking for cheaper alternative. So I could be overheated. So I went with energy chmagh worth performing asset. You got one.

I think that if we've learned anything from the last three years, you have to separate the valuation of a company and how IT performs in the stock market with its value in society. So for example, if you look at zoom, zoom e's valuation has crated, but its value in society has probably continue to go up, but still a massively rely upon tool. The point is that markets do not give you credit for the value in society.

They will give you credit when you are about to overturn, but then they will pull IT all back when they think that you are going to understand. So in that lens, I think that tech will have a tough year. I think energy will have a really shit year.

And probably the biggest asset class that is going to get pressured is going to be junk debt. And the reason is a bunch of these variable rate loans when rate heart five than six percent, that all of a sudden are like eleven, twelve, thirteen, fourteen percent coupons. The a bunch of companies will have trouble meeting their dead obligations and have to restructure the debt or we'll have to file so text energy performing asset for twenty and twenty .

three subcategory watch monster said I think office towers in simple cisco or that is some serious toxic debt, twenty seven percent vacancy rates and growing as leases role. Uh, I think that a lot these buildings, maybe virtually all of the great Scott wnp w's, going to be owned by the bank soon.

because no one computer.

specially the office, specifically the office towers, that no one want to be in those those skyscraper buildings, south market mired in homelessness so um yeah I mean, I think that lot of billion people by the banks, there be some major fire sales member. This is the hottest sst commercial state market in the country a few years ago, and now it's the worst.

Look what look what i'm going to be read. What do you think about that crazy thing that happened with the blackstone, right? I mean, that's not no black son has a product called be read.

It's like a seventy billion dollar exchange traded fund effectively. And what is is, is the ability for individual investors don't access to black stones in our commercial real stay portfolio. And they had such a massive amount of redemptions that they had to close redemptions at the end of q four.

And they were worried that the redemption tions were going to continue to go up. These are individual investors who basically seize the writing on the wall is, David said, and wants their money up. And so they went to the university of california pension system, and they essentially got a huge infusion of capital.

I think there was about four billion dollars where they guaranteed eleven in a five percent interest to these guys for the four billion dollars and they also posted a billion dollars of their own equity in the actual read to backs up IT. So um what does that show you? I think what saxes thing is really right.

It's IT may not just be in safran ago, but you know with all of these people either getting laid off, with all of these people now working remotely, we may finally start to see the beginning of the reckoning in commercial real state, which has been an unbelievably performance dasa class up until right about now. And and on top of that, you have to factor in these much higher rates and saw these building owners, if they finance IT, which they invariably have always financed, they have huge variable repayments that are due on these buildings. The rent roles are lower.

Even people like twitter is just refusing to pay the rent. So you have to take them to court so IT in a long gates when they have to pay. And so you could miss a bunch of rent payments in over certain the banks could just go crazy .

and take otherness of these six. okay. Do you have a worst performing asset class for twenty twenty three? Prediction center of science, queen of kinda dave.

Uh, it's it's really simple. I've mentioned IT before the consumer credit. We assume that raising rising rates and inflation .

would taper down consumer.

uh, demand convenances consumers buying goods and stuff. And that certainly hasn't happened. I am in vagus right now. I was in the car yesterday and the driver grew up in vagus.

Uh, he's like and although i've lived my whole life in vegas, he's like, i've never seen a december like we just had IT was packed the entire mount. He's like Normally in vegas is dead up until Christmas and the new year years people coming to town, but it's Normally dead. He like, i've never seen such a busy month.

And I think we see this in the numbers. Consumers are still spending like it's twenty twenty one. They're still spending like interest rates to zero as we talked about um consumer credit is skyrocketing, wall rates are skyrocketing.

Um and so I think we're going to run into a real wall with respective consumer credit in um sometime this year. And you're going to see as you guys, such a complicated interwove and market of assets s the the way that this this can be traded. There's a lot of different ways to trade IT, but I think it's gonna.

In general, consumers are not going to be able to meet their debt obligations. And two defauts could be mortgagees can be credit card debt defaults are coming yeah, if you put the market has Priced a bunch of obviously companies like a firm and know what they called a pay later companies, but you are a card companies, mortgages, there's a lot of assets they can start to kind of pick apart. Where do you think this sun travels first? How does what gets hit hardest? What's under Price and over Price?

Probably a lot of good pair trading to do as jamaa kind of to talk about, uh, with respect to which of these are more likely or less likely to be sensitive to this dynamics. But there's I think it's it's going to be a pretty ugly scene. A consumers just have wait too much dead relative to their earnings right now, and it's pretty sting.

And they have some confidence that they'll always have a job or some way to .

pay there for easy payments. It's hard. It's muscle memory is serious. You know you come out at twenty twenty one when you had um it's not just annulus checks. IT was the low interest rate and easy credit availability everywhere.

And it's just easy to jump into getting new stuff and calls off. And then when you get used to getting new stuff every week or every month, you kind of a stick with IT and you're like, I don't want to give you up just yet. I just yet, not just yet, you know. And so it's it's hard to kind of step back from spending when you have a new type of lifestyle. And I think that's what's going on.

I think this is an incredible observation.

And there's a great tiktok of this guy that runs car dealerships and he sent them out unlike how much incredible money had, like what a significant percentage people's income they are spending on their monthly car payments. And people buy these cars that are well beyond what should be kind of a reasonable budget if you were to go to soosie orman preach. And the stretching is is going to snap this year yeah .

absolutely brings us to the most anticipated or I love at great one most anticipated trend of twenty twenty three related to yours. I went with austerity. I have a friend who sometimes flies private often, and I was talking to him about his Christmas vacation.

This friend of mine math, instead of flying private to his vacation, he had to pick up his kids. He had to go back in the, he was driving his car. That three out, that was you. okay? I don't want to to cook.

He was so .

much so great to buy private lajoie and he's like, no, I can't go out with your skin on friday. I ve got to pick up my kids and then i'm drive, right? I said, wait a second.

How you doing that? I'm driving a car. I said, what whose driving the car? He said, i'm driving the car. And that's why I say I D is my interest.

Try and I agree with you. I actually think this is a really good opportunity to pull back on so much waste. I haven't really looked at my household budget and probably two or three years didn't even bother.

And then and then when when I looked at IT, I was like, well, this is really inflated to a level that I didn't expect. Yes, but IT makes a lot of sense to live in a more head down all their way. I don't know. Yeah, I well, I mean.

look at tonight menu you want with duck. I I guess the olive fed while ago, everything is off the menu now. No black truffles were having poetry next week. We're gonna posta. It's okay to austerity .

measures all for a reason, right?

Oh my god, sex a do you buy into austerity where chamar on I or austerity beltin as our trans? Where where are you which your trend for?

I think it's a pretty good trend. The trend that I am gna suggest will be to your great disappointment, jack, which is trumps influence in the G O. P, continues to vain.

You're seeing IT in real time right now. The headline is trumps endorse improves, worthless, to have a Cathy in the speaker bid. Even the maga faithful, like mac gates, like lahm, bober, they are ignoring trump's to get behind my Kevin.

And in fact, they're kind of not just define him, but making fun of him. My gates had a reposed trump saying sad examination point, and board was saying that trump needed to get behind her movement. So we have now a level of of open defiance to trump in the top, his endorsements just not or not what they once were. And even if somehow Kevin mcArthur lls us off, I think all that means is that trump gets blame for every swamy rino compromise that mccarthy has to make to keep the government unit over the next two years. So it's a lose, lose.

does that? I mean that populism is on the way, do you think? Like because it's the electorate that got an elected in the first place.

He was not very popular with. He was kind of an outcast when he got elected the first time. And that maybe the case now, but he still got elected because the population loved and people loved them.

Is that going to happen? Giving that means that the popular m is kind of waiting or the interest of the the voters is waiting on him. Or is this just the political parties?

Only one by a few thousand votes actually .

has to do with trumps personal standing. After the mid terms the canada said he personally picked that were all in tough races. They obviously lost IT was about the distraction he caused by making the twenty twenty election such a big deal constant looking backwards.

So I think the republican party doesn't like the antics. It's not about the policies. I don't think. I think it's one hundred percent about the about trump s select ability and about his ability to get things done. And it's not really about the positions per say. So I think we would to answer your question, I think that the future the top will incorporate this populi sm, but it's going to find a Better integration with the established wing, the republican party and future chemists will have to basic satisfy both of those wings of the party.

Sex was IT. Was the store that, or maybe the two shows that broke the hamels back for republicans and trump? H in that relationship was IT january six. And the election denial, like for republicans is is just like, come on.

those are the two things. This constant focusing on the twenty twenty election first IT cost them the cost. Republicans that George are on off sea with purdue against warn oc purdue one on election night didn't clear fifty percent had to go to the run off.

This was happened the day before january six has happened in january fifth of twenty twenty one. That was the first race where trump's tics costume. Then you had this midterm election where you know all the candidates who had to a peace trump, by talking about, again, the last election of looking to the future, they got purified by the the voters. I think republicans want to win. I mean.

they are tired of volusia.

Is that simple?

Yeah, the job of a politician is to win freeburg. You got to anticipate the trend of twenty .

twenty three I am excited about and wanna share the point of view that I think i'm selling. Gene therapies are becoming more mainstream.

S so these are for macedo dal modalities where we use uh g editing systems where you can actually go in and change or add a genetic material to sell in your body to resolve things like genetic diseases, or change protein efficiencies or introduced new proteins and then self therapies where we engine yard cells put in the body and those cells go and do things like attack and destroy cancer cells. For example, there are currently twenty seven F D A approved chAllenging ing therapies on the market. There are over a thousand in clinical trials, many of which are already showing extraordinary efficacy and benefit.

Today, these therapies cost upwards of a million dollars. So I think there's a massive and caught up the infrastructure investment conversation earlier because of the number of diseases and the number of conditions and the number of people that these therapies can treat, adding those massive infrastructure investment opportunity coming forward this year, but also seeing these come to market. Comical trials get F, A approved.

We have to ramp up and build up the infrastructure needed because it's not traditional. We make a drug in a factor incentive to people and they get IT injected. These are much more complex.

They require much more complicated delivery mechanism. You have to have systems to engine yard cells and eat them and put them back body. Those systems today take gaze or weeks and costs as a result a million dollars lus per treatment.

So I think that um the seven gene therapy opportunity, you know the J P Morgan healthcare conference starts this week. Uh it's the biggest biotech and health are conference in the world, starts in seven six on monday. This is uh one of the big gest areas of interest and one that everyone's investing against. Um but as these come to market, you know we talked about this last week genetic disease of types of cancer that are going to be addressed. And I am really excited about seeing more of these products come to market and seeing the whole kind of infrastructure and delivery system change.

All right, starting interrup, trying to keep the trains moving, the editing, very good choice. All right, we end with this a little bit fun. Most anticipated media for twenty twenty three.

These are things we like to talk about the media here. Sometimes we talk about White lotus season two amazing season and maybe what you're looking forward to next year. I am really looking forward to in film, open hymir Christens movie about the manhattan project that should be extraordinary.

I loved was done. Kirk is as well. I loved done kirk. I like everything he does. And when he him becoming like a history uncle, I am here for IT i'm here for no in becoming our history uncle instead of batman.

What was the one after inception that was really confusing the one with dense or washington sun but john washington.

ah yes. Um IT was um I couldn't finish that. I tried the twice. I got to go go first shot on .

that when I was, oh yeah, I IT was his worst film. IT was really difficult. IT was called a ten .

ten tenant. Yes, about like time and reverse in this.

Did you guys see his original film.

which was IT was .

mind bending enough that you're like, all my god, incredible. And then I think they took a too far ten. And I tried to watch IT three times and generally pretty good with these sorts of films and love on. But oh my god, IT was impossible to follow.

He he took a too far.

Okay, so hopefully he goes .

back to his roots. In terms of T, V series. I'm looking forward to secession coming back.

A soka who is a antic sky worker, A K doh raters, padwar. Ted last two season, three coming up. Those are for me, incredible. And then on the bookshop, man, the Michael Lewis book about sbf is gonna next of I cannot wait for that tax. You're immediate junky.

Would he got on your list of things you looking forward to? Or should I say, what does tucker's writers? Where do they put down for?

Well, jack, I thought you're going to pick I I thought for movie, you're going .

to pick cocaine bear, I can't wait for the bear does look really amazing, but great for can bear .

is extraordinary. A bear is in the woods and A, I guess, people who are trafficking in cocaine drop there or crashes. And the bear eats the cocaine and then goes on a rampage.

A john refilled like in the crocodile away. By the way, i'm listening to quit in talents. Ino's book, by the way of criticism.

Get the audio book you will like IT sacks. He talks about all films in the seventies. Very good shadow to quinton. What do you? You got what you got on your short list by .

his rankle me.

yeah.

What I just gave you on coking .

back top of your list.

Watch timer was on my list and now I think marvel is doing a good job developing a new villain arrival of anos with this with king. I don't know what phases are on now, but look reason to and then the new ant man movie. And no, I thought after that O I won't really be able to top that but yeah, they've come up with a really good concept, I think, for the next twenty marvel movies that .

will eventually become great to.

yeah, you guys had completely fucked up. You have missed the most .

obvious slam .

go bum doing part two.

Oh, I have a watch number one year.

I can't wait. What you know what .

happens to .

my wife wants .

to watch IT. IT is so .

stylistically beautiful. IT is a little boring. There's going on, but it's so well shot.

It's a few.

It's visually just stunning. I mean, if you need to watch on the big screen with big speakers, uh but part two comes at in november this year.

Absolutely okay, right? freeboard. Tell us what documentary on veganism they are recommend and your anticipating for twenty twenty three, what vegan documentary or animal abuse documentary.

I am excited about the general A I days media that I think is gonna start to canna rocket this year. We could see, for example, the first, you know, ai written simponi, the first kind of A I written published novel. I interesting with A P like a full novel, publish ai. And and more nearly short films based on A I driven script and maybe even what what i'm really excited about as these A I based interactive video games or um kind of experiences where you, the user kind of get to create and live your own world uh, through some sort of video game type a modality. So I think A I driven media.

all right, there you have the folks there .

are speaking of pop culture chaos. I guess prince Harry has a book coming out that's called spare despair .

in the english and the air spain .

so he's calling himself but but to me that's like a weird self description yeah like that's how yourself he .

didn't they paid him so much money. I'd heard they have to sell one point seven million books to break given.

But you know that reminds me of is when letter nimoy wrote a book, I think he went a book called I am spot and then he wrote a book called .

I am not spock nice.

He can never get comfortable with the fact that he was a .

Spark yeah .

and there's something weird about calling yourself spare like you know you're clearly not comfortable with it's like everything yeah .

everything they taught you, everything learned at harvard business school and everything they don't teach at harvard business school. You can you can do both books or I listen, this has been great a breaking news as we're talking here ChatGPT, uh, OpenAI doing a tender offer at twenty nine .

billion with you is three .

billion a day. Oh my god. Who is buying a twenty?

It's founders fund, reportedly according the journal founder fun thrive capital. So finder's fun does .

not generally do super over Price deals.

I mean.

come I would I would not totally .

could be by the way, you guys remember that the um open a eye. I don't know what the current situation is, but IT was a nonprofit ah where they said investors put money in, but the investors maximum return was a one hundred x on the dollar investing it's a non profit but of that happened up none of that happened afterwards when they .

the regal model appear in the origin .

model of a non profit where there was no cap because there was no concept of equity. Yeah when they flipped, they capped everybody to a hundred on the return. So the .

original money.

but you know the original money, which was like elan's money, who has put in money read yeah all that money came in as yeah as pure non profit.

So I don't know how IT converted, but that's convert.

And is this a tender of the shares? twenty?

So again, like the the thing that I wanted impress upon you is like there is an enormous amount of work that they do that what their biggest gap to monetising. This will be finding unique content that they learn on that nobody has sets access students. This is why I I really think it's important.

Understand, if you have enough compute these all of these on supervised learning models, if you run them on, the same training set will converge to the same answer. So you're just getting there first. So in order to be really defensible, you have to get there in a unique way.

And so either you're gona hang tune or you're gonna happen puts that different. So I don't I don't know the answer. That's why, like they have to answer that question in their fund raising, and i'm sure that they did because these are smart vectors. But that's the big idea that you have to overcome. And again, you have to think like you think google is sitting on their hands.

No goog.

why twenty nine billion?

Like what fundamentals is that based on? Like why not five billion? Why not three billion? And a why I makes .

double value? That's omentum said, nothing to do with reality, right? I mean, if this would imply at a thirty the public comes on the google trades at what twenty five or thirty ebit times ebata.

So this would empty a billion dollars in ebata, a billion dollars in ebata, three million dollars day. They're losing three million dollars day on computer, reportedly three million dollars day. And profit on what product I don't know to have a .

not the issue, I don't work. I mean, my point was if these guys open up a set of tools that support all these applications and services to emerge on top of what they're built and they're getting read share, getting payments out.

that it's gonna quickly turn into real. Here's that is why that they don't have the rights to the data they built the training set on. And the second they commercialized that, the second anybody pays them, whoever they based this on, they're going to get so into a living on, I predict suit, into a living on to .

a lets talk about that. The next shock that that the way that A I works, and we should probably bring someone like sam talk, but the way that A I works on training data. And now people are making claims that the training data is copy right. Therefore, the model output is that protects a copyright is, I think, worthy of a good conversation interest. Early, the early version .

of the of the internet was very simple. It's like you out of this file called robots, that T, X, T, and you would basically be open to a craw or not. And that's what would allow google to basically go in spider your pages, right? And so we have to replace this concept of .

that with this I D T X T.

Well, you could make a claim that this is no different than, you know, a spider crawling a web page, except that in in the search case there was much cleaner, which is we're just to index your page and redirect people to you. Uh, here is we're actually going to create derivative work because of you and hard. And I do think that that's gonna a very interesting legal thresh that has .

to get figured out here if you're in IT. exactly. It's a derivation work and they did not have permission to use IT.

And IT impedes upon the original authors whether it's a photo, it's a song, it's a piece of code. IT impedes upon their ability to do commerce in the world. You are interfering with their ability to monitise their content.

And the percentage using is one hundred percent. So when you get to fair use, non commercial use is very protected, parities protected, educations protected. But when you dip into using the entirety of the work which they are doing, and you impede upon the person's ability to commerce, and you confuse the public the test that they will fail, fail, fail. This is why I think that most .

people don't understand what I is. They don't even understand the difference between training and inference. So hopefully there is some more understanding of this. But if you use the same data set, you will eventually convert the same out with absent of hand tuning weights, which has its own issues, and absent any asame tricity different data that you have that nobody else has.

absolutely. yes. So if you are apple and you have to watch data, or you're google, you have the search data or your weather company have other data and your property, of course, there's a very easy solution to this two month number one stations. When the algorithms ves you an answer, you should say, what were the top percentage sources of this information?

How did the A I picks? Look, if you look inside of a transformer, the problem is OK that you're going to have trillions of ranks, trillions of weights, trillions. And so how are you going to decide how to basically draw a line under a threshold? This was actually a useful input, and this was not.

So again, I I just think that guitar, a very few small class of people actually understand this, like the great person actually bring in to talk about this would be Andrew carpathia. not. And I think his under was there.

Sure, ana tesla. And but he can say in a very display, al, way to explain this to people. I think we should, we should ask him to come on.

Yeah, for sure. I mean, I can ask him, I I mean, this is brand. Is this the law? Sexual and atterley you understand? Fair use, copyright, all the the law cRicky. If i'm wrong here, sacks does not anticipate .

this look to highly specialized area. I don't want to pretend like I understand the law in the syria. I want to talk to a specialist.

Yeah okay, what I think I think, yes, this is a great I for us to talk about because this .

is probably why, by the way, they started this open source, because I was like a slam dunk thing to make this a nonprofit and open source. Everything big, maybe in part because of these issues, but if you just let the code run free. You probably don't have to even deal with these issues, right?

While they they closed the member their claim. The claim was this is too dangerous. The original claim was it's too dangerous for people to not see the code.

Then sam flipped on that and he said, it's too dangerous for people to see the code. And IT started out as a non profit, where the idea was, the way to keep this safe is for everybody to see the code. But they didn't make any money. They went private and they flip the decision. So keep that in mind as well.

He's a, he's a very, very, very clever .

and he's happy. And you know.

paul graham, when paul grimm picked them to run Y. C. Paul graham said that this is the most impressive person i've met. sen. Steve jobs.

yeah, but remember me about gary ton is now running. why? See, starting this week, sam movement, friend of the pot.

come on all in any time and has played in our poker .

game several times. But yes, we we had a tough situation there were you interfere in the hand, if you remember? Uh, alright, listen, there was a salmon.

I were in the hand of poker he raised. I had two pair. And i'm trying to figure that he have a sad or he block ing me. I think he's got top pair. And you were like, all look at this and you sort of commenting .

on the hand and I had to meet the color.

not yet. And and I like china for mela bush. Let's let's stop talking here because i'm trying to i'm play hand. I'm like, okay, sam would get and I basic into the conclusion sam, get the great delight. Blotting with hand is a risk ker, he knows unconservative, he knows his.

I'm gna call here with my I head bottom two because as I have a set and there was also a strain on the board, I like fucking I I at best and, you know, even money here. But there was a lot of pots I was just do in the pot, warm to the part you were like, which is usually me. I would, usually they want to be reprimand top, but if I listen, love you best.

What can you tell people that there's no comments?

And just as a program, I me note, we turned off comments for a couple of weeks on the youtube just to see how the psychological affects me and further moves to just ask with all your briga donors, we love you best is this has been in a great too great and his twitter is actress and he doesn't read IT so everyone .

listening no tax tax and I voted against turning off comments. I voted in favor .

whatever got how chaos vote for the all in summer twenty three so that's how I think this is worth trading now. But the podcast has never been Better. Best spending time together on the slopes is the cure to all evils will see you next time.

your.

World, man.

We open sources to the fans and they .

just .

got crazy with.

Should all get a room big world.

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