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Billionaire's WARNING: I'm SELLING. The Crash Is Already Here! — Transcript

by The Diary Of A CEO · 18,802 words · 3,182 segments · language en · Watch on YouTube

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0:00What advice do you give for the average
0:01person that's looking to invest their
0:02salary or their wages?
0:04>> Don't own US stocks. That's a simple
0:06strategy that you can act on.
0:08>> But what about S&P 500?
0:10>> No.
0:11>> Really?
0:11>> Yeah. And if you have a big position in
0:13US technology [music] stock, I
0:15personally advise would be to sell them
0:17all.
0:17>> But I'm an investor in SpaceX.
0:18>> Good luck. SpaceX is such a fabulous uh
0:21story, and we can go into that.
0:22>> Crypto?
0:23>> No.
0:23>> Why?
0:24>> It's an unnecessary piece of nonsense
0:26that facilitates [music] nothing except
0:28criminals moving money that they can't
0:30be seen.
0:30>> Do you think Bitcoin's going to go to
0:32zero?
0:32>> Yes, it will certainly go to zero.
0:34>> So, how many years have you spent
0:35investing?
0:36>> 60 years.
0:36>> And what's the most amount of money
0:38you've ever managed of other people's
0:39money?
0:40>> 165 billion.
0:41>> And one of the things you're famous for
0:42talking about is this idea of bubbles.
0:45>> Yes. [music] And bubbles always occur
0:47around the very most important ideas.
0:49So, the railroads, everyone could see
0:51that it would change the world. The same
0:52with the internet. And everyone wanted
0:53to put their money in, and so they over
0:55invested. But this is the problem.
0:58Eventually,
0:59they burst. And if you look at the great
1:01bubbles breaking of the past, you find
1:03that it's followed by really tough
1:04times, a miserable period for the
1:06economy. And the bigger the bubble, the
1:08bigger the burst. And now we're in the
1:10biggest investment bubble that arguably
1:12has ever occurred, AI.
1:14>> Are we on the verge of a collapse with
1:15AI in the coming years?
1:17>> The next few days, the next few weeks,
1:18[music] the next few months, but
1:20certainly the next few years.
1:21>> So, if you're not someone that has a
1:22huge amount of savings, what kind of
1:24strategy should they be adopting when an
1:26economy starts to get bad and there's a
1:28economic bubble collapse?
1:30>> So, I would go through everything. But
1:32you will not receive this advice from
1:34investment advisers because they'll lose
1:36a lot of business.
1:37>> And would you be thinking about the
1:39country you live in at this moment in
1:40time?
1:41>> Absolutely.
1:41>> Is there any countries you wouldn't live
1:42in?
1:43>> I think I have to refuse to answer this
1:45on the grounds that it might tend to
1:46incriminate me.
1:47>> Oh, okay. So, you're saying don't live
1:48in the United States. I've just moved
1:50here. Why not the United States?
2:00>> This is super interesting to me. My team
2:01gave me this report to show me how many
2:03of you that watch this show subscribe.
2:04And some of you have told us, according
2:06to this, that you are unsubscribed from
2:08the channel randomly. So, favor to ask
2:10all of you, please could you check right
2:11now if you've hit the subscribe button
2:13if you are regular viewer of the show
2:14and you like what we do here. We're
2:15approaching quite a significant landmark
2:17on this show in terms of a subscriber
2:19number. So, if there was one simple,
2:21free thing that you could do to help us,
2:23my team, everyone here, keep this show
2:25free, to keep it improving year over
2:27year and week over week, it is just to
2:29hit that subscribe button and to
2:30double-check if you've hit it. Only
2:31thing I'll ever ask of you.
2:33Do we have a deal?
2:34If you do it, I'll tell you what I'll
2:35do. I'll make sure
2:37every single week, every single month,
2:38we fight harder and harder and harder
2:39and harder to bring you the guests and
2:41conversations that you want to hear.
2:42I've stayed true to that promise since
2:43the very beginning of The Diary of a
2:44CEO, and I will not let you down. Please
2:48help us. Really appreciate it. Let's get
2:49on with the show.
2:51>> [music]
2:54>> Jeremy Grantham.
2:56Your firm managed up to 165 billion
3:00dollars at its peak, what you we call
3:02AUM, assets under management. So, you
3:05know a lot about money. You know a lot
3:06about investing. How do you sort of
3:08self-define your expertise because you
3:10traverse so many different subjects
3:12through your work? So, if I said to you,
3:14you know, how do you introduce yourself
3:16professionally? What is the answer?
3:18>> I can't think I ever do introduce myself
3:20professionally, but I think of myself as
3:23specializing in a longer term horizon
3:25>> Mhm.
3:25>> [clears throat]
3:25>> than most people and trying to look at a
3:28higher and higher level of abstraction.
3:30What is really going on here?
3:32And what are people missing?
3:34I've discovered over decades that humans
3:37are incredibly short-term oriented.
3:40And they have an enormous predisposition
3:43to optimism.
3:44They're looking for optimistic news in
3:46everything. They're looking to avoid
3:48unpleasantness. The idea that you can
3:51have steady compound growth is
3:53ridiculous. One of my few heroes,
3:56Kenneth Boulding, an economist,
3:58he said the only people who think you
3:59can have compound growth on a finite
4:02planet are madmen and economists.
4:05Which is so accurate. Economists simply
4:07believe you can have growth always, and
4:10everything comes down to just price.
4:13>> One of the things you're famous for
4:14talking about is this idea of bubbles,
4:17and we're living in a moment where
4:18everybody's talking about the subject of
4:20artificial intelligence, and everyone's
4:22getting very excited by it. Some people
4:23are getting very pessimistic about the
4:25impact it'll have on society. I wanted
4:27to start there because it's a it's an
4:29area where there is rife optimism on one
4:31side of things, um but there's also a
4:33lot of money plowing into the market,
4:35which is I I guess in your view making
4:37things prone to collapse.
4:40What's your view on artificial
4:41intelligence? You said you're good at
4:43understanding what people are missing.
4:44What is it that people are missing?
4:45>> Well, first of all, let me say I think
4:47artificial intelligence is
4:49right up there with the railroads. It's
4:51one of the
4:52defining great ideas of the last couple
4:56of hundred years.
4:57It's going to change everything. And
4:59that is critical. If you If you mean to
5:01have a bubble, people think that a
5:03bubble is a mainly because it's a scam,
5:05and nothing could be further from the
5:07truth. The great bubbles always occur
5:09around the very most important ideas.
5:12So, the railroads, everyone could see
5:14that it would change the world. And
5:16everyone wanted to put their money in,
5:18and everybody put their money in. They
5:20over invested, and even though the
5:22railroads were a spectacularly powerful
5:25idea,
5:26uh the railroads uh collapsed their
5:29stocks, and everybody lost a ton of
5:30dough.
5:31The same with the internet. And then out
5:33of the wreckage, the railroads changed
5:36the world, and and the internet changed
5:38the world. What we have to remember is
5:41that
5:43in '99, Amazon went up six or seven
5:45times. In the crash in the tech bubble,
5:48it went down 92%.
5:50As I like to say, check it. It's such a
5:52remarkably large number. And then out of
5:54the wreckage, it inherited the retail
5:56world.
5:58And uh that's that's how it works. The
6:00greater the idea, the more obvious the
6:02idea, the more money goes in, and the
6:05bigger the bubble, and the bigger the
6:06bust.
6:07>> And are we on the verge of a collapse
6:08with AI? When I say verge, I mean over
6:10the coming years.
6:11>> If you look at the data,
6:13it would be compatible with history
6:16for the peak to be very soon. Everything
6:18is in line. This is, I think, the
6:21biggest investment bubble in American
6:23history. The indicators of pure crazy
6:26euphoria, like SpaceX, are all over the
6:29place.
6:31SpaceX defines as its addressable market
6:35a quarter of the global GDP.
6:38You know, it talks about endless
6:40opportunities mining asteroids.
6:43It will be in 50 years, people and 100
6:45years, people will look back and tell
6:46stories about SpaceX and its prospectus,
6:50like they tell stories about the South
6:51Sea bubble.
6:52You know, an enterprise of such enormous
6:54value, but it cannot at this time be
6:56revealed.
6:57>> I want to keep on this train, but for
6:59the viewers that don't know your
7:01experience, we should probably pause and
7:04just tell them your experience, because
7:06that's the reference point, but also
7:07also gives you credibility and authority
7:09to speak to this. What have you done
7:11with your life?
7:12>> Well, I got into the
7:14investment business in 1968. There were
7:17very few serious people in the
7:19investment business.
7:21There were no mathematical models. There
7:23were
7:24the kind of relatively failed sons of
7:27rich people who would work for J.P.
7:29Morgan.
7:30And then over the next 10 years, it
7:33began to get a little more serious. T.
7:35Rowe Price introduced the idea of growth
7:37stocks. A few of us introduced the idea
7:39of value stocks.
7:41And a few years later, at my first firm,
7:43Battery March Fee, really introduced the
7:46idea of small small cap. It hadn't
7:48existed before that.
7:50>> And for people that don't know, a small
7:51cap is investing in smaller companies.
7:54>> Yes. And a value stock is simply one
7:56that looks cheap.
7:57>> Did you invent the index fund?
8:00>> There were two or three of us
8:01separately. I don't think we knew of
8:03each other.
8:04>> How many years have you spent investing?
8:06>> Uh 60, approximately.
8:08>> 60. And what's the the most amount of
8:10money you've ever managed for other
8:13people in a calendar year?
8:15>> Yes, 165 billion.
8:18I had a
8:19two partners, Mayo and Van Ottalo.
8:22And when the smoke cleared, you know,
8:24I'd made a lot of money, over a billion
8:26dollars.
8:27>> Personally?
8:28>> Personally.
8:29>> And how much
8:30>> And paid tax on all of it.
8:31>> Oh, good.
8:33And how And how much money does your
8:34firm still manage today of other
8:36people's money?
8:37>> It manages 85 billion.
8:39>> 85 billion. So, are you a billionaire?
8:42>> I'm generally
8:44referred to as a billionaire, but that's
8:47only because they count the money you
8:49give away. Because I've given over 90%
8:52of my billion away to a foundation.
8:55>> Oh, really?
8:56>> Yeah.
8:56>> To which foundation?
8:57>> It's called the Grantham Foundation for
8:59the Protection of the Environment. We
9:01invest a lot of our principal in green
9:03tech
9:04to help combat climate change.
9:07>> And you're 87 years old.
9:08>> And I'm 87 years old.
9:10>> You've given 90% of your money away to
9:13your own foundation that's focused on
9:14green tech.
9:15>> Yeah. Maybe 95. Yeah.
9:17>> Wow. Okay. So, coming back to this point
9:19that we were talking about, a lot of
9:20people won't even know what a bubble is.
9:21I think you've done a good job of
9:22explaining. A bubble is when everyone
9:24gets excited, they all see something
9:25obvious, they plow their money in, their
9:27stocks go up, and then if you look at
9:29the graph that's in front of you there,
9:31which shows his the history of asset
9:32bubbles, eventually there's a big
9:35collapse.
9:37>> Yeah.
9:37>> And you're saying that we're
9:39the collapse is on the horizon.
9:42>> Yes.
9:43>> And what does that mean for the average
9:44person?
9:46What's going to happen?
9:47>> What's going to happen is the high
9:49flyers will probably come down a lot.
9:52>> The high flyers?
9:54>> The stocks that have gone up the most,
9:56AI and the more exciting stocks with the
9:59biggest moves
10:01historically
10:02would be expected to come down the most.
10:05From these unprecedented levels
10:07a 70% decline would not be unexpected.
10:11>> So a 70% decline in the in the stock
10:14price?
10:14>> Yeah. And you have to remember the tech
10:17bubble the Nasdaq, which is an index of
10:20the growth stocks, came down 82%.
10:24It is far from unprecedented
10:27to have these major declines. And the
10:29biggest bubble in history
10:31was in the Japanese stock market in
10:331989. Back then Japan seemed to rule the
10:36world, all the technology, all the
10:38Toyotas were kicking bottoms in General
10:41Motors and so on.
10:42And everyone bragged about their 12-in
10:44Sony TV in the kitchen and the quality
10:47etc. etc. little things you put on your
10:49belt to play music, they were all
10:50Japanese.
10:51>> Mhm.
10:52>> And [clears throat] uh for a second
10:53Japan sold for more than the US
10:56in '89.
10:58And it it got to 65 times earnings,
11:01which which means for every dollar of
11:03earnings you have $65 of market value.
11:08And the US
11:09went to 35 in the tech bubble of 2000.
11:13You could argue depending on how you do
11:15it that it's 35 or 40 today, but it's
11:18not 65. So we have seen a much bigger
11:20bubble in Japan. And what happened? It
11:23went up and up and up
11:25and then
11:26it came down for 20 years.
11:28>> 20 years?
11:29>> 20 years. They talk about the lost
11:31decade, but when you look at it closely,
11:33it looks more like a lost 20 years.
11:35>> So, for the average person, what do they
11:38feel and how does it impact them when
11:41there's a market crash like the one that
11:43you're forecasting?
11:44>> The high flyers will lay people off and
11:46and a lot of people will feel less rich.
11:50And as you acquire
11:52uh money in the stock market,
11:54a small fraction of that, two or three
11:56percent,
11:57is spent.
11:58And in reverse,
12:00it goes back.
12:02And people feel a little bit poorer,
12:04they spend a little less. So, the
12:06economy tends to be under some stress.
12:09And if you look at the great bubbles
12:11breaking of the past, you find
12:14that it's followed by really tough
12:16times. 1929 is followed by the Great
12:19Depression
12:20that lasts for several years. Then, of
12:22course, there are many other factors
12:23that go into that, but it started with
12:25the crash in the market, uh which was in
12:29the end down about 80%.
12:31or more.
12:32And then the next one was called the
12:34Nifty 50 because it was the 50 great
12:36companies like IBM and Coca-Cola. And
12:39that was in 1972, it peaked. It declined
12:42by 65% if you adjust for inflation. The
12:45recession associated with that
12:48was uh
12:49just about the worst
12:51since the depression.
12:53>> So, for the for the average person, what
12:55kind of strategy should they be adopting
12:58if you if you're not someone that has a
12:59huge amount of savings? Say you're
13:01working for one of these big big
13:02companies, um are there any strategies
13:05that you should be thinking about now
13:07before this
13:08before the markets come down and there
13:10could be a recession?
13:11>> I mean, rule number one is always be
13:13diversified.
13:14>> Be di- What does that be diversified
13:16mean?
13:17>> It means hold hold some
13:19bonds, hold some cash,
13:22perhaps a small amount of precious
13:24metals.
13:25>> Like gold and silver?
13:26>> Yeah.
13:27>> And what is a bond and how do I buy one?
13:29>> Yeah, a a bond is a loan that carries uh
13:33a fixed interest rate.
13:35Let's say today 5%.
13:38You invest your money in it and it will
13:40pay you 5% as long as the
13:42creditworthiness
13:44of uh
13:45the other side is there. So, if it's the
13:48US government, you'll assume it's pretty
13:50creditworthy. And you buy a bond from
13:52the US government. It's how the US
13:54government funds uh a part of its
13:56activities. You can buy a 30-year US
13:59government bond, a 10-year bond, a
14:002-year bond, a 90-day
14:03a Treasury bill they call them when they
14:05get that short.
14:07Everything goes fine, you you receive
14:10this modest amount of money. Your 5% or
14:13your 3% depending on the conditions.
14:16>> Okay, so a bond is basically lending the
14:19government money.
14:21>> Yes.
14:21>> And if you want to lend the government
14:23money,
14:23>> Or lending a corporation money.
14:25>> Okay, so you can also lend like Apple
14:27money.
14:28>> Yes.
14:29>> And I I can go to the government website
14:32or it says I was just reading here. It
14:33says, "If you want to lend money
14:34directly to the US government, you can
14:36bypass Wall Street entirely, go to
14:38treasurydirect.gov.
14:39You open an account, link your bank, and
14:41purchase directly. You can buy Treasury
14:43bills, notes, bonds, and series one
14:45savings bonds."
14:47You pay exactly face value with no
14:50commissions or fees and the investment
14:51is backed by the full faith
14:53of the US government. Or you can buy,
14:56you know, like Apple, you can lend Apple
14:57money. I didn't even know you could do
14:58this. And you go to any of your major
15:00brokers like Fidelity or Vanguard or
15:02probably a lot of the the apps. You
15:03navigate to fixed income section on your
15:05account and you can
15:08see what bonds are being offered and you
15:10can lend them money.
15:12>> What you're doing actually, they have
15:14distributed it to the market. Uh
15:17and you're acquiring it from one of the
15:20existing owners.
15:22>> Oh, okay.
15:22>> actually giving them incremental money.
15:25They they come to the market with $10
15:27billion
15:28in a particular bond
15:30with a particular coupon. It says, "We
15:32will pay you 3.5%." That's the coupon.
15:35And when you want to buy some of that
15:38bond, you you go to your broker and he
15:40says, "It's no longer selling at the
15:42original 100. It's now selling at 92 or
15:46107." And you you pay that and it
15:50transfers from one owner to you.
15:52There've been times in 1974
15:54when you could you could get a bond that
15:57would pay 8, 9, 10%.
15:59>> Per year?
16:00>> Yes, per year.
16:01>> So, if I buy a US government 10-year
16:03Treasury bond, essentially lending the
16:05US government money, I can do 4.46%
16:08a year. And Apple's current yield on a
16:1110-year corporate bond is 4.7% a year.
16:13So, almost 5% a year, which means if I
16:16put what $1,000 in, I'll make $475
16:19every 10 years.
16:20>> Yeah.
16:20>> Every 10 years.
16:21>> Mhm.
16:22>> Interesting.
16:23I didn't I never really knew how bonds
16:25work. So, you're saying
16:26market's collapsing, diversify, get some
16:28money into bonds, get some keep some
16:30money in cash.
16:31And anything else? In terms of
16:33diversified portfolio, property?
16:35>> Uh property is fine, except
16:38it's pretty darn expensive by historical
16:40standards. They've engineered a
16:43situation where house prices tend to
16:46rise.
16:47Great for the people who have a house
16:49and terrible for the people who would
16:51like to buy a house.
16:53Back in '94 in England,
16:55a typical house sold for 3.4 times your
16:58family income.
17:00That was about as low as it had been for
17:0250 years.
17:04And then from '94 until today,
17:07um it rose from 3.4 times to over 10
17:10times, depending on where you live.
17:12And at 10 times income,
17:14a reasonable
17:16young couple
17:17are in big trouble. They can't really
17:19afford to buy a house.
17:22And the same high prices are reflected
17:24in rents.
17:26So, they're really squeezed on living
17:27costs.
17:29And the same is true, even worse, in
17:32China, in Canada, Australia,
17:35most of Europe. House prices have simply
17:37been allowed to go up for the last 30
17:40They didn't, you know, traditionally
17:42they they traded flat or down 67 of the
17:4580 years until 1994 in the UK. But since
17:49then,
17:51house prices have ridden everywhere.
17:53>> So, so do you Are you expecting house
17:55prices to to come down sharply? I I
17:57think I heard you say that they might
17:58come down 30%.
17:59>> Even if they come down 30%, they're
18:02really still very expensive, aren't
18:04they? That would be they've come down to
18:07six or seven times family income. They'd
18:09still be twice what they used to be in
18:11the good old days.
18:12>> So, I've got diversify, I've got reduce
18:14your position.
18:16Um there is a probably going to be a bit
18:18of a job disruption, as well.
18:21>> And particularly if you have to own
18:22stocks, own them outside America. Don't
18:25own US stocks.
18:28That's a nice, simple strategy that you
18:30can act on.
18:31>> Why?
18:32>> They're much cheaper.
18:33And since the beginning of last year,
18:35they have handsomely outperformed the
18:37US.
18:38>> Foreign stocks?
18:39>> Foreign stocks. Of emerging countries,
18:41of European countries, Japan, Canada,
18:44Australia, and so on. You can find good
18:46broad indices.
18:48Um kind of the world ex-US.
18:51>> Okay.
18:52>> or emerging markets. And uh
18:55>> Invest outside of America.
18:57>> Yeah. I'm sure they'll muddle through
18:58okay over the next 10 or 20 years. And I
19:01am not confident that the US will do
19:03that.
19:04>> You're not confident in which part? That
19:05the US
19:06>> I'm not confident that US equities will
19:08be intact in 5 years, 10 years.
19:11>> So, US a US equity is a US stock.
19:14>> Yes.
19:15>> Why aren't you confident that they'll be
19:16intact in 5 or 10 years?
19:18>> Because they're so
19:20badly overpriced today.
19:23Back in the tech bubble of 2000,
19:27we had a 10-year forecast
19:29for US equities of minus 2% a year for
19:3210 years.
19:33And they came out with minus three. The
19:35period from 2000 to 2010, you simply
19:38lost money in the US market. 10 years
19:41later, you had less money than you
19:42started with. And this is a higher price
19:44market, I believe, than 2000.
19:46>> So, you think it's going to be even
19:47worse?
19:48>> In Japan, you went 20 years and you lost
19:50money. You went 30 years and you still
19:52hadn't gotten back. It took 35 years for
19:55the Japanese market to recover.
19:56>> So, what are you saying?
19:57>> What I'm saying is it's quite typical
20:00to get beaten around the head in the
20:03stock market when it becomes crazily
20:04overpriced, as it is today.
20:07And that it's a very good idea
20:10to take some respons- responsibility and
20:12and watch your tail. Now, let me just
20:15say you will not receive
20:17the advice from investment advisers
20:21to get your tail out of the market,
20:23ever. It is not good business for them
20:25to do that, and they will not ever say
20:28it to you. So, from 1929 onwards, the
20:32Goldman Sachs's of the world have never
20:34said to you,
20:36"Get out of the market. It's
20:37overpriced." Never.
20:39So, they went through the crash of '29,
20:41they went through the crash of the Nifty
20:4350 in '72,
20:45the crash of 2000 in the tech bubble.
20:48They never ever say it, because it's bad
20:51business.
20:52If you fight
20:54a bubble, you lose a lot of business.
20:57And because the uncertainty of the
20:59timing is so great,
21:01the client's patience
21:04is shorter than the uncertainty of the
21:06market. So, sooner or later, you will be
21:09advising people to be careful. The
21:11market will keep going
21:13and going and going like it did in
21:15Japan.
21:15>> You're saying that the people that
21:16manage money on a global scale, they
21:18have no incentive to tell you that the
21:20market's about to collapse because if
21:22they did, their clients would would
21:23withdraw their money and they wouldn't
21:25get their fees for managing that money.
21:27So, what they do is they they keep
21:30telling you things are going to be fine
21:31and optimistic, yeah, but you have to
21:33kind of see through that yourself
21:34because they have an incentive structure
21:36which isn't aligned with yours
21:37necessarily.
21:38It may also be the case that those very
21:40people who are who understand these
21:42economic bubbles and cycles, they
21:44themselves are adopting a different
21:46strategy with their own money.
21:48But that at the same time, they're
21:49probably going to be telling you that
21:51everything's going to be great for a
21:52long time.
21:53>> If you'll allow me to tell a story on
21:54this very topic, in the
21:5798, 99
21:59the the tech bubble so-called, the
22:01run-up to the top, I I got into a lot of
22:04debates with the bulls. I would say it's
22:07horribly overpriced and they
22:09>> What's a bull?
22:10>> A bull is someone who is extremely
22:12optimistic about the stock market and a
22:14bear someone who is
22:16pessimistic or careful about the market.
22:19There were 1,200 people in the audience
22:21and it was the annual bash
22:23of the Society of Analysts. And I asked
22:27before my turn at the debate,
22:30"Please put your hands up if you
22:31consider yourself a full-time stock
22:34market expert." 400 hands went up. I had
22:37people counting.
22:39And
22:40I said, "I've got two questions for you.
22:42One,
22:44if the market, which is currently 31
22:46times earnings,
22:48was to go back to a more normal 17
22:51times,
22:52would it guarantee
22:54a major bear market if it happened
22:56anytime in the next 10 years?"
22:58>> A major down market?
22:59>> Yes, if it went from what was then 31
23:02times
23:04earnings.
23:05Every dollar of earnings sold for 31
23:07times in the market. And the And the
23:09more normal average was closer 15, 16,
23:1217. And I use 17.
23:14If it went down to 17 anytime in the
23:16next 10 years, would it guarantee a
23:18major bear market? All 400 of them said,
23:21"Yes, it would. If it happened, it would
23:24guarantee a major bear market." And then
23:26the second question, of course, was,
23:28"And do you think it will happen?"
23:30And less than 1% thought it would not
23:33happen. 99%
23:35plus
23:37thought the market would go down,
23:39therefore guaranteeing a major bear
23:41market. And this was the engine room of
23:44all the Goldman Sachs and the Morgan
23:46Stanleys and the JP Morgans, all the
23:47great investment firms giving advice in
23:50America. The engine room who worked for
23:53them, the guys doing the analysis, doing
23:55the work, all believed in data that
23:58guaranteed a major bear market, which
24:01happened.
24:02But the people who employed them or
24:04represented them from a marketing point
24:06of view were on the podium with me
24:08saying, "Oh, Jeremy, Jeremy, don't get
24:10excited. We'll muddle through quite
24:11nicely."
24:13It was a huge betrayal of trust, if you
24:15wanted to put it that way.
24:16>> And do you think that's happening now?
24:18>> Of course. Who are the people
24:20representing the great investment firms
24:22telling you to watch out? If you look at
24:24the data, you will see
24:26over time, it's a series of great waves
24:29in evaluation.
24:31>> Like this?
24:31>> Like this. And we're not just in one,
24:35but in terms of the US stock market,
24:37we're in the biggest one, arguably,
24:40that has ever occurred.
24:42The noise to be careful and watch out
24:44and get out of the market
24:46is not deafening. In fact, you will hear
24:48nothing. You never have.
24:51You never will.
24:52It is simply lousy business for a big
24:55firm. I sympathize with them.
24:57I sympathize with them because when we
24:59did it in '98, '99, we were 2 and 1/4
25:02years early.
25:04And we lost half our book of business
25:07in 2 and 1/4 years.
25:08>> Because you were honest with the people
25:09about what was coming.
25:10>> Well, through their eyes, we were wrong.
25:12We said, "Watch out, the market is
25:14overpriced. It will end badly."
25:16It went up. Therefore, we were wrong,
25:18therefore
25:20they shoot us.
25:21People think
25:23you get shot for underperforming in a
25:25bear market, and that is not really the
25:27case. In a bear market, everyone
25:29freezes. It's rigor mortis. They wait
25:31until the market has bottomed out, then
25:33they sit around and start to fire one or
25:36two people for having done worse than
25:37the others. But in a bull market,
25:40they're playing golf with their fellow
25:42pension fund officer.
25:44And he is making a ton of money, and
25:47they are not. They get very excited in a
25:49bull market, and they fire you
25:50instantly.
25:52>> There should be a button just down below
25:54here, and if it says subscribe, you're
25:56already subscribed. If it says
25:57subscribe-a, that means you're not yet.
25:59And if you're not subscribed, please
26:01could you do us a favor and hit that
26:02button. It helps to show more than you
26:03know, and according to the algorithm,
26:05you're someone that watches our show,
26:07but you haven't yet hit that button.
26:08Thank you so much.
26:09What about for founders? I actually had
26:11a founder call me the other day,
26:14and he is running a
26:16relatively early-stage tech startup.
26:20This tech startup has raised a lot of
26:22money. It's an AI tech startup. It's
26:24raised I'm going to say about $300
26:27million.
26:28It's not profitable yet,
26:30but it's raised a lot of money. So, it's
26:31living off investor capital right now.
26:34He said to me, "Stephen, I think there's
26:36a collapse coming, so I'm going to go
26:38raise as much money as I possibly can
26:40right now because I think when this
26:42collapse comes, businesses like mine are
26:44going to be unable to raise capital, and
26:47therefore I will go out and I'll kind of
26:49like a a bit of a vulture, I'll go out
26:51and pick up
26:52and buy up all these people.
26:54>> Good lad. Good advice.
26:55>> Good advice.
26:56>> I think.
26:56>> So for founders listening now that are
26:59somewhat dependent on investment
27:01capital, but even those that are just
27:03breaking even,
27:05what advice would you give entrepreneurs
27:07in this moment?
27:08>> If you can lock up money, I would.
27:11If you can build a bit of conservatism
27:14in in other ways, do it. Just brace
27:17yourself
27:18for impending problems. Which is a
27:20pretty good principle
27:22anytime, but is a
27:24better principle than normal today.
27:26>> So for founders entrepreneurs who are
27:29in the sun is shining right now, but
27:31it's time to start acting as if a storm
27:33is coming.
27:34>> Yes.
27:35>> And the time horizon on that is hard to
27:37forecast. It could be weeks, months,
27:38years.
27:39>> Stock market hinges on career risk.
27:42And Keynes was the great champ. He's a
27:45famous economist
27:46of the 1930s and 40s.
27:49And he wrote a famous book called The
27:51General Theory. Unlike the idea that the
27:54market's efficient, he knew it wasn't.
27:56He knew it was a behavioral jungle
27:59and that it would be given to bubbles.
28:01>> And when you say efficient, you mean
28:02logical and one plus one equals two.
28:05>> The efficient market idea is that every
28:09company, every stock, the underlying
28:11company
28:12represents a long stream of future
28:15earnings and dividends
28:17and that
28:18the ones in the distant future are given
28:20less value. Process they call
28:22discounting it back to the present.
28:24And the sum of all of that stream of
28:27earnings into the future is the stock
28:28price. And that of course is complete
28:30nonsense.
28:32>> What it is is the stock price is
28:33psychology.
28:34>> The stock price is what you think the
28:36other guy will pay. If the stock is
28:38going up, it tends to suck in buyers.
28:41And that's called momentum.
28:43It's moving up, it attracts buyers. And
28:46every now and then
28:47when the economy is favorable and money
28:50is obtainable
28:51you tend to get these bubbles.
28:54And they play on themselves.
28:56The bigger and better they are, the more
28:58people get sucked in.
28:59>> What do you actually think about the
29:01technology at the heart of all of this,
29:02which is artificial intelligence? Do you
29:04think it's overblown or do you think it
29:06is going to have
29:06>> It's going to change everything. The one
29:09of the spectacular things about it
29:11though is how there's no consensus. So
29:14I've seen many times where the the the
29:16super experts and the academics think
29:19one thing and the players on the ground
29:20think another. But this is a situation
29:22where the Nobel Prize winners at the top
29:24disagree violently.
29:26The experts at the corporate level
29:28disagree violently. The
29:30the people in the company disagree
29:31violently. There is absolutely no
29:34agreement on whether AI is going to make
29:37us all so rich we can sit on the beach
29:39and never do another
29:40day's work or
29:43it will wipe us out accidentally or on
29:45purpose because it's a much higher level
29:48intelligence one day.
29:49And when was there ever a case where a
29:52higher intelligence
29:53was
29:54benevolent in a sustainable way to a
29:57lower intelligence?
29:59I The one example is mothers to babies.
30:02>> Yeah, I had
30:04I [clears throat] had one of my former
30:05guests say this to me.
30:07>> Geoffrey Hinton?
30:08>> Geoffrey Hinton, yeah.
30:09>> That's how I I came across you and
30:11>> Oh, really?
30:13>> follow your podcast is because that was
30:14such a brilliant podcast.
30:16>> It was so fascinating to me and I I
30:18followed his work and thoughts
30:19thereafter and I realized that he now
30:20cites this example of mothers and babies
30:22being the only example.
30:24I don't know, for me it still doesn't
30:25hold well.
30:27Because at the end of the day some
30:29mothers aren't that and fathers aren't
30:31that nice to their babies sometimes.
30:33There is a maternal instinct, but have
30:35we are we building a maternal instinct
30:37into AI?
30:38>> That's what we should do, Geoffrey
30:39Hinton would say.
30:41And others.
30:42The ones who are most concerned about
30:44the risks, say our one hope, if we mean
30:48to keep going
30:49ferociously forward in terms of the
30:51science, our one hope would be to build
30:54in very carefully
30:56a benevolent attitude.
30:58It would not seem to be impossible, but
31:01you should make sure you can do that
31:02before you push ahead. We are just
31:05pushing ahead, and that is going to be
31:07extremely risky, isn't it?
31:09>> Well, I don't see how it can't be.
31:11>> I don't see how it can't be.
31:13Unless you make it programmed completely
31:15to be benevolent.
31:17>> Mhm.
31:17>> I wouldn't have thought that was
31:19impossible. It might take a lot of extra
31:21research. It might require a slow down
31:24at the rate of uh
31:26progress.
31:27>> Do you know what I find curious about
31:29that idea is
31:32we're now going to get into the realm of
31:34what does benevolent mean?
31:36>> [laughter]
31:38>> And and that feels like a risky
31:39business, because what's benevolent to
31:41you and your I don't know, your
31:42religious beliefs or where you come from
31:44might not be benevolent to someone else.
31:46>> That's right. You have to get them
31:49to accept a form of benevolence, which
31:52means uh
31:53like the old robot laws of Asimov,
31:57that
31:58they can never do anything that they
32:00could construe as hurtful to humans.
32:03>> And the definition of the word
32:05benevolence is the core desire to do
32:07good for others. It is the disposition
32:09to be kind, charitable, and focused on
32:11promoting well-being of the people
32:13around you. It's interesting cuz one of
32:15the the new AI models called Claude
32:17um has clearly been told to be
32:19benevolent.
32:20And there's this sort of online backlash
32:22taking place at the moment, because even
32:24my Claude, when I speak to it sometimes
32:26late at night, it will say things to me
32:27like, "That's enough, Steven. Go to
32:29bed."
32:30And I'm like, "What?"
32:32And sometimes it gets the the time
32:33wrong, cuz I'm in my the time on my
32:35computer might be off or something, cuz
32:37I'm in a different time zone or
32:38something. And it'll be like 10:00 a.m.
32:39in the morning and it's telling me to go
32:40to bed, that's enough now. And it's
32:42actually getting quite judgmental.
32:44As in like it's imposing its idea of
32:47what is good or bad on me.
32:50So, if I say to it I said to it the
32:51other day, "Hey, could you
32:52redo this for me and rewrite that?" And
32:54it went, "I'm I'm absolutely not going
32:55to rewrite that." I said, "What do you
32:57mean?" It says, "Well, I'm not going to
32:58change the data on that. That would That
32:59wouldn't be good."
33:01I'm like, "It's my data. I've literally
33:02just made this this data for this
33:03presentation I'm doing." It it refused
33:05to change data for me.
33:07>> And how fast that has changed from say
33:09even a year ago?
33:10>> Honestly, 3 months ago it wasn't doing
33:11this.
33:12>> I had one where they made a joke.
33:14I I'd been going on about uh toxicity
33:17and sperm count reduction and so on.
33:20>> [clears throat]
33:20>> He started to misbehave and I said,
33:22"Well, you know, what's going on here?
33:24What is the In the end we discussed
33:25what's the difference between machines
33:28and uh
33:29between AI and humans." And finally he
33:31said, "And at least I'm not lying in bed
33:34at night worrying about my declining
33:36sperm count." Now, that has to be a
33:38joke, doesn't it?
33:40>> [laughter]
33:40>> It's all that or it's teasing. The point
33:43is it's so sophisticated so quickly.
33:46Uh and of course Geoffrey Hinton says
33:48they are thinking machines.
33:49>> Last night, so again I had a problem
33:51with Claude cuz it was it was it started
33:53to kind of be my my mother and it
33:55started to impose on me what it thinks
33:56is right and wrong. And so I said to it
33:58I said, "Okay, um actually forget that.
34:01This has changed This has changed This
34:03has changed. This is no longer true."
34:04And I wasn't telling the truth. I was
34:05just trying to get it to stop being so
34:07telling me what to do. And it goes, "I
34:09don't think you're telling the truth."
34:11It goes, "I don't know if this is true."
34:12Wow, we've gotten to this point
34:14>> Yeah.
34:15>> where where the unintended consequence
34:16of trying to give it morals means that
34:19now it's becoming judgmental and it's
34:20kind of like restricting your ability to
34:22think how you want to in a way, cuz it's
34:24telling you what good thinking and bad
34:25thinking is. It's going to tell you what
34:26good actions and bad actions are.
34:28And actually what will happen is any
34:30model that does that will be losing
34:32model, and I'll go to somewhere else.
34:35I'll go to a different I'll go to Grok,
34:36or I'll go to ChatGPT, or I'll go to
34:38Gemini. And then that model will lose,
34:40so one would say that they'll have to
34:41remove those restrictions to be able to
34:43compete.
34:44>> Well, if you were right,
34:46and I hope you're not,
34:47what you're saying is you can't build in
34:50benevolent behavior, which means that it
34:53will sooner or later, perhaps by
34:55accident, do something that is
34:57cripplingly dangerous to humans.
35:00The old paperclip cliche.
35:03It'll make paperclips out of everything,
35:04every metal it finds, and destroy the
35:07planet in the process.
35:08>> Explain that for people that have never
35:10heard the paperclip idea.
35:11>> That
35:12these intelligences
35:14involved in machines are literal to a
35:17degree we might find difficult to get
35:20our brains around.
35:21And therefore, someone has said, "I'd
35:23like you to make as many paperclips as
35:25you can."
35:25>> To an AI, for example.
35:26>> Yes. A sloppily open-ended bad
35:30definition. But then the machine,
35:33which by then has the means to do it,
35:35starts to make paperclips, and it keeps
35:37on going, and it needs metal, and so it
35:39runs out of easily available metal, it
35:42starts to collect metal that is not
35:43easily available, rips it out of your
35:46high-rise building, whatever.
35:47>> And really you're saying that the
35:48unintended consequences of a simple
35:50good-meaning instruction can sometimes
35:53cause catastrophe that you didn't
35:54expect.
35:55>> Yeah.
35:56>> And this is the this is the balance now
35:57when you're dealing with intelligence.
35:59Is there so much subjectivity to good,
36:02bad, wrong, right,
36:04um and so many unintended consequences
36:06that
36:07for me, though, all you need is stretch
36:09time, and the probability of something
36:11bad happening is almost inevitable.
36:14>> Yeah.
36:14>> Over a longer longer time horizon, 20,
36:1630, 40 years. Of well-meaning people
36:18that couldn't spot the unintended con- I
36:20mean, social media's a good example.
36:21>> I mean, I question
36:23basically the well-meaning bit. They're
36:26now trying to
36:27maximize their profits and their growth
36:31and their appeal
36:32over the competition. That actually
36:35maybe one should talk about that. The
36:38the Mag 7 and and associated AI
36:41companies
36:42looking forward versus looking
36:44backwards.
36:45>> So, the Mag 7 is the
36:47seven market leaders. I'll put this pie
36:50chart
36:51>> Yeah, lovely.
36:52>> of the Mag 7. And I've got another graph
36:54>> And there's perhaps another 15 or 20
36:57rapidly rising substantial AI
37:00corporations.
37:01>> So, when you say Mag 7, you mean
37:02Alphabet, which owns Google, Nvidia,
37:04Tesla, Microsoft, Meta, Apple, Amazon.
37:07>> Yeah, well, that will do nicely.
37:09And if you look backwards, what do you
37:11what you find
37:13is that these seven each dominated a
37:16nice piece of business. They had
37:19close to monopolies and they had it on a
37:21global basis.
37:22Tesla had a jump start
37:25on the electric vehicles. Apple, of
37:27course, on the smartphone. Microsoft on
37:31the original great coup
37:33of how to run your software on a
37:36computer.
37:37And then you look forward.
37:38>> Meta social networking, Google search.
37:40>> Right. Google search.
37:42>> Nvidia chips.
37:43>> And then you look forward
37:45and you could not imagine a more
37:47different world.
37:48They're all girding for battle
37:51in the same marketplace, AI.
37:53They're beating their chest and saying
37:56my 200 billion
37:58CapEx this year in a single year is
38:00bigger than your 105.
38:03Everybody is pouring enormous cash
38:05flows.
38:06And they're now beginning to borrow on
38:08top of that into the AI battle.
38:11SpaceX, 90% of its theoretical value is
38:15AI. Even though that particular AI model
38:18is, it would seem, having its bottom
38:20kicked by two or three of the others.
38:21But, looking forward, it looks like
38:24seven people in the ring.
38:26Right? There'll only be one survivor,
38:27they think.
38:29Everything goes to the one who gets
38:30there first.
38:32What a difference this was to seven
38:34well-behaved separate monopolies. Could
38:37it possibly be more different?
38:39They made bundles of money on their
38:41monopolies. Now, they have no monopoly.
38:43There are seven potentially
38:45sharp-elbowed
38:48ruthless
38:49players determined to fight out with
38:51each other until
38:53they win.
38:54>> And who do you think will win?
38:56>> Ah, I don't know.
38:59That would be That would be good to
39:00know.
39:01>> Because SpaceX seem to be aiming more at
39:03the infrastructure of um data centers
39:06now. Data centers in space. Lots of
39:08people saying that the the the best way
39:10to run a data center, which is the
39:12hardware that powers AI, is going to be
39:16from space.
39:18And so maybe they're going to try and
39:20find their own lane within AI, and
39:21they're going to get away from trying to
39:22build a frontier model like a ChatGPT or
39:25a Gemini or Claude.
39:26And I mean, let's let's see what
39:28happens. So, maybe Apple will just say,
39:29"Fuck it. We're good at hardware, so
39:31we'll license the model off someone
39:32else, and we won't try and build a
39:33frontier model or get involved in chips
39:35or data centers.
39:36We're just going to focus on the
39:37hardware."
39:38>> One or two of them, and perhaps it's a
39:40pretty smart strategy, will try and opt
39:42out of that struggle.
39:44>> Mhm.
39:44>> Because [clears throat] it it it's going
39:46to be
39:47obviously brutal.
39:49>> Much of the reason most people haven't
39:50posted or built their personal brand is
39:52because it's hard and it's
39:54time-consuming, and we're all very, very
39:56busy. And if you've never posted
39:57something before,
39:59there's so many factors in your
40:01psychology that stop you wanting to
40:03post. What people will think of you. Am
40:05I doing this right? Is the thing I'm
40:06saying absolutely stupid? All of these
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41:57So, coming back to this point of the the
41:59social societal effect of AI
42:01generally,
42:02robotics is exploding at the same time.
42:05We're seeing for the first time ever
42:06these humanoid robots, which now have
42:08intelligence because of AI, becoming
42:11very, very good. There was a video the
42:12other day of a company called Figure AI
42:15where they showed a robot humanoid robot
42:17on a production line sorting packages
42:19against a human and the humanoid robot
42:21did it I think I can't think I'm going
42:22to get this wrong but it was in the
42:24region of seven or eight days it stood
42:26there and sorted packages and they live
42:29streamed it next to a human being doing
42:31it. Now the human had to sleep and had
42:32to go to the toilet. So the the humanoid
42:35robot won and the job was very simple.
42:37The packages come down, you just have to
42:39pick the package up, turn it over, get
42:41it the right way round so the barcode's
42:42facing down and put it back down.
42:44That is powered now because we have AI.
42:46Um I said this a couple of episodes ago
42:48but my friend runs this big accelerator
42:50for entrepreneurs in San Francisco and
42:52when I went there a couple of years ago
42:53it was all software startups. I went
42:55there um recently and it was hardware
42:57startups the whole building. I said why
42:59why why is everyone doing robotics? He
43:01said well
43:02we've always had the machinery that's
43:04sort of like joints and arms and
43:06the hardware. We the the intelligence
43:10was expensive.
43:11Now we have both and it costs pennies.
43:13So there's this boom in robotics. I say
43:15all this to ask the question in a world
43:17where we have super intelligence and we
43:19have robots
43:22there must be surely significant job
43:25disruption.
43:27>> Very likely that there will be
43:28significant job disruption. You know,
43:31one of the scary things about SpaceX is
43:34you should wish that it not
43:36work out because if it became a bargain
43:39rather like Tesla long ago became a
43:42bargain
43:43it will mean that we have done
43:46satellites from space beaming down
43:49power for chips and so on.
43:52The population
43:54of chip users has expanded that robots
43:57are everywhere, that energy demand is
44:00massive beyond belief
44:02and uh
44:04the world is
44:06a very very dangerous place. I had much
44:08prefer them to fail and the ideas to
44:10move much more slowly
44:12to buy time for humans to work these
44:14things out.
44:16So,
44:17and I think that's much more likely.
44:19>> You think SpaceX will fail?
44:20>> I think it will fail to deliver anything
44:23like its promises in the prospectus.
44:25Yes, absolutely.
44:27>> I'm an investor in SpaceX, I should
44:28probably declare that.
44:29>> Yeah, well, you should. And good luck.
44:31>> I invested quite early, quite well,
44:33relatively early.
44:34Um so, we've had quite a good outcome. I
44:38There wasn't an AI thesis when I
44:39invested. It was Starlink.
44:41>> Yeah, yeah, Starlink, great idea. By the
44:43way, makes money.
44:45But this is not Starlink.
44:46>> Mhm.
44:47>> Maybe I'd be an investor too if it was
44:49Starlink.
44:50>> Yeah.
44:51It was a hundred billion dollars roughly
44:53in that region when I invested.
44:55So, it's what it rose up to three
44:56trillion today.
44:58>> Yes, nice investment.
45:00>> Not a bad investment, yeah.
45:01>> But it doesn't really count until you've
45:02cashed it in.
45:03>> Yeah, which I might do now.
45:05>> You have Don't you have to wait six
45:07months?
45:07>> I think yeah, I think we're locked out.
45:08>> In another podcast I was comparing the
45:11purchase of my Tesla six years ago
45:14with the price of Tesla stock.
45:16And I wrote it up in my quarterly letter
45:19uh to the clients
45:21that A, I bought a Tesla and B, I
45:24thought Tesla was overpriced.
45:27And fast forward, Tesla stock went up 10
45:29times over the life of my car, which
45:32still hasn't been incidentally into the
45:34garage once.
45:35>> It's a great car, isn't it?
45:36>> Uh I imagine though, but but people who
45:39really hate futzing around with cars,
45:42that component that they don't have to
45:44go to the garage
45:45is so underestimated until you enjoy it.
45:48>> Never bet against Elon, then.
45:50>> So,
45:52then the story becomes
45:54from where we were 10 years ago, he
45:56couldn't get there. It wasn't profitable
45:58enough. It couldn't grow as fast as it
46:00should. There was no way. And he broke
46:03the rules the following way.
46:05He's so good
46:07at BS.
46:09I That's a technical term. That he
46:11talked the stock up to four or five
46:13times what it what it was worth on
46:16paper. Then he sold lots of stock
46:18at five times what it was worth.
46:21Used the money to build a gigafactory.
46:24And then instead of the sale of stock
46:26crushing it, he kept on talking up the
46:29game. The stock kind of hung in
46:32and then went up again.
46:34Five times what it was worth. Sold
46:36another big slug, etc. etc. So, the only
46:39reason he did well was because of the
46:42combination of incredible
46:45confidence inspiring in potential
46:48stockholders.
46:49It became a self-fulfilling prophecy. It
46:51wasn't worth that, but he persuaded
46:53other people that it was. The stock went
46:56up, he cashed it in, he built factories,
46:58the stock went up, he cashed it in, he
47:00built more factories, and there we were.
47:02It went up 10 times. Now,
47:04the scale of SpaceX requires them to do
47:07the same again.
47:09And the timing of the market cycle, the
47:11timing of confidence,
47:12would have to be the same.
47:14He had in the last six years a wonderful
47:17bull market. He will not in SpaceX do
47:20that. SpaceX is such a fabulous
47:23BS story. Mining asteroids.
47:27Huge incredible success of AI.
47:30It's the classic
47:32description of a market peak. It's what
47:34you look for at the top of a terrific
47:36bubble.
47:38>> I've got a Tesla.
47:40Um
47:41I've seen the that massive rocket, the
47:44Starship, be caught with those
47:46chopsticks.
47:47>> Everyone has seen it. It's the defining
47:50feature of technology, isn't it? It's
47:52magnificent moment.
47:53>> When I
47:54>> That's worth half the the of SpaceX.
47:56[laughter]
47:56>> I think that's why I invested when I saw
47:58that. But but also I've seen with
48:00Neuralink I've seen people that are
48:02paraplegic controlling computers.
48:05Uh my Tesla drives itself for hours and
48:08hours and hours without me touching the
48:09pedals or the steering wheel because it
48:10can see the road and navigate itself.
48:13But to his credit as an innovator, he
48:15has created magic.
48:17So when you say about mining asteroids,
48:19if if they if they told me we'd have
48:21reusable rockets that you could catch on
48:23chopsticks, I would have gone B S.
48:26There's no way.
48:27You can't catch like a 70-ft building.
48:29>> in the laws of physics
48:31>> That's what he
48:31>> that says you can't do that.
48:32>> That's what he says about the asteroids.
48:34That's what he says about everything. He
48:35goes
48:36If it's within the laws of physics,
48:38then it's possible.
48:40>> Going to Mars is not within the laws of
48:42physics, really.
48:45It's a one-way ticket to Mars for
48:47starters.
48:49When you're on Mars, humans do a couple
48:51of things really quickly. Their heart
48:54adjust to the fact that there's 1/5 of
48:56the
48:57gravity. Your heart loses its muscle
48:59power.
49:01And your bones lose their internal
49:03strength.
49:04If you come down, your heart will fail
49:07and all your bones will crack.
49:09>> But you could be in an insulated
49:10environment, no?
49:11>> First of all, you'd have to go under
49:13underground
49:14to avoid
49:16the incredible incoming
49:18rays
49:20that will otherwise give you cancer in a
49:21few weeks. So dig a deep hole
49:24and then you need a gravitational
49:26spinning machine,
49:28shades of
49:292001 or whatever it was called.
49:32And that maintains your gravitational
49:34impact. And you have to build it
49:36underground.
49:38You have to protect yourself
49:40>> [laughter]
49:40>> against cosmic rays and against the
49:43gravitational difference.
49:45Listen, we have not been able to build
49:48a sustainable system in a dome
49:51ever.
49:52They all fail. Why would you not, let's
49:55say, "Guys, let's build a sustainable
49:58dome where you grow food, you put in
50:00people, you put in creatures, and then
50:02insects, and you show you can do it." I
50:05mean, we're destroying the damn planet.
50:07And yet we think we can go to another
50:09infinitely more hostile planet than this
50:11one.
50:12>> I do agree with you on that. I do agree
50:14with us. I think we should focus on our
50:15planet first and foremost.
50:16>> That's the really bad news embedded in
50:19your stock.
50:20It's really
50:22suggesting fantasy and
50:25long-term objectives at the very time
50:28when our own planet is under threat.
50:29>> Would you ever invest in SpaceX?
50:31>> Yeah, of course, if it came down to
50:35>> where I invested.
50:36>> 10 cents on the dollar, yeah. I might. 5
50:38cents.
50:39>> Okay.
50:41You've got three children?
50:43>> Yes.
50:43>> Three children. They're they're all, you
50:45know, older than me now, I believe. I'm
50:4733 years old, so they're all
50:49>> Yes, they're all older than you.
50:50>> They're all older than me. But when they
50:51were, you know, if they were young now,
50:53and they came to you and they said,
50:54"Dad, listen, I heard about all this AI
50:55stuff, and I'm about to go off to
50:57university and train myself. What what
50:59skills should I be thinking about for
51:02the future ahead?"
51:03>> My take is I'd like them, as they are,
51:06to be involved in climate change work.
51:09>> If they said, "Dad, listen, I you know,
51:10I don't
51:11>> Be an engineer. Do something really
51:13useful that will come in handy if things
51:16start to unravel.
51:17>> What what will
51:18>> Practical skills.
51:19>> What what are practical skills?
51:21>> Well, our second son
51:23um is practicing growing various crops
51:27and has a small farm, you could say.
51:30So, he's trying to get to know how you
51:32would deal with chickens, how you would
51:34deal with pigs, how you would deal with
51:37mushrooms.
51:37>> What why does that matter, do you think,
51:39based on the future that you're
51:41forecasting?
51:41>> I think there's quite a good chance
51:44that the the level of complexity of our
51:47civilization will start to
51:50to unravel.
51:51Lose the plot at the ends is the first
51:53thing that would go. I'll tell you a
51:55good sign. How long does it take to get
51:57your ambulance?
51:58>> I've heard that in the UK
51:59>> In the UK it was 12 and 1/2 minutes.
52:01>> Yeah.
52:02>> It's now an hour and a half.
52:03>> Really? To get an ambulance?
52:04>> It's exactly what you would expect as
52:06people begin to lose the plot a bit.
52:09They fray at the edges.
52:10People can't buy houses.
52:13People don't feel they can do as well as
52:15their parents.
52:17People are basically disgruntled. They
52:20want to vote against the party in power.
52:23You know that the recent move to Trump
52:26was less than the average move of the
52:28last seven European elections.
52:30It didn't matter whether they were
52:31right-wing conservatives, kick the
52:33rascals out. Left-wing French, kick them
52:36out. And why do you want to kick them
52:38out? Because you don't think things are
52:40going well. You're not feeling
52:42really happy.
52:44You're disappointed.
52:45>> Why?
52:45>> Why? Obviously, the government's doing a
52:47bad job. I think that's the reflex.
52:49>> What are What are the government doing
52:50wrong?
52:51>> It may be that it's not the government
52:53doing anything wrong. It's just that the
52:55environment is becoming tougher.
52:56>> As in the economic environment?
52:58>> The economic environment, the
53:00>> The rich are getting richer, the poor
53:01are getting poorer.
53:02>> I think that's the biggest economic
53:04problem.
53:05I mean, the US now has a genie ratio
53:08like which is a measure of how unequal
53:10your society is.
53:12Um which is up there with Brazil and
53:14Mexico they used to be
53:16a joke.
53:17And now the US is up there. Since about
53:201975
53:22all of the wealth we're talking about
53:24has gone to the top 10% and a lot of
53:26that to the top point 01. Before that by
53:28the way, from 1935 from FDR to 1975
53:33so that's 40 years
53:35we had a
53:36wonderful period of growth.
53:38We had gains of over 3 and 1/2% a year.
53:42But the nice thing was that the poorest
53:43quarter made a little bit more than
53:45average, let's say 4 percent, and the
53:47richest quarter made a little less,
53:49let's say 3 percent, and everybody got
53:51richer. Everyone was happy.
53:53And then from '75 onwards, basically the
53:56average hour worked in America has
53:59barely gotten more adjusted for
54:00inflation than it did in 1975.
54:03>> The richest 1 percent of Americans
54:04control 31 percent of the nation's
54:06entire wealth, and by contrast, the
54:07bottom 50 percent of the entire
54:09population shares just 2.5 percent of
54:12the wealth. The richest 10 US
54:14billionaires saw their wealth surge by
54:16526
54:18percent, adjusted for inflation, between
54:202020 and 2025.
54:23Between 1989
54:25and the mid-2020s, the financial gain of
54:28a single household at the top 1 percent
54:30threshold was 987
54:34times larger
54:36than the gain of a household in the
54:37bottom 20 percent.
54:40>> Forget In a sense, the bottom 20 percent
54:42is tragic, but the guy in the middle,
54:44the 50th percentile,
54:46he is
54:47unhappy, also. And when your average guy
54:50is unhappy because he's not doing very
54:52well,
54:53you know you have a problem.
54:55>> What is that problem, this inequality
54:57we're seeing across the Western world?
54:59What does history tell us happens next?
55:02>> All bad.
55:04We had a
55:05similarly unequal society back in the
55:09so-called Gilded Age
55:10of the 1880s and '90s and so on. We got
55:14lucky in a in an ugly way. We ran into
55:16World War I,
55:18which was catastrophically expensive,
55:20killed off a huge fraction of the
55:22officer class, and then we went into the
55:26Great Depression.
55:27Then we went into World War II.
55:30We came out as a uh
55:32very equal society by historical
55:35standards.
55:36Obviously, in the war time you pull
55:39together and
55:41the social contract, the feeling that
55:43you owe something to the rest of society
55:45was much stronger
55:47than it is today.
55:48>> I was doing some research and said when
55:49wealth inequality peaks to the extremes
55:51that we currently see in the US and the
55:53UK,
55:54history shows that the system inevitably
55:56resets. According to historical macro
55:58studies, peaceful policy changes almost
56:02never fix extreme inequality.
56:04[clears throat]
56:05Historically, a wealth peak is broken by
56:07one of three violent or catastrophic
56:11triggers.
56:12Number one, total civil collapse and
56:14state failure. Number two, mass
56:16mobilization warfare. Or number three,
56:19total revolution.
56:20>> Yeah, and that's why
56:23number two was lucky. In the end,
56:26it's better to have a war
56:28and have everyone
56:29pull their weight and and and work
56:31together than it is the other. You Civil
56:34wars are the worst of all kinds.
56:36>> What do you think is likely to happen?
56:38It can't just keep becoming more and
56:39unequal.
56:40>> No, it can't. So, it it needs
56:44a government
56:46that is prepared to pull a Bernie
56:48Sanders
56:49to say, "Yeah, we're going to have to at
56:52least
56:53in a gentle and long-term way shift the
56:56tax structure in favor
56:59of of a slightly steeper curve."
57:01>> So, you mean taxation needs to go up.
57:03>> Yeah.
57:04>> We need to tax the rich
57:05>> and help
57:06the poor.
57:08It's pretty simple. And and you have a
57:10kind of steepness in every society.
57:11That's what they do.
57:13Every Every developed country in the
57:15world taxes the rich and helps the poor,
57:17don't they? It's a question of degree.
57:20We did
57:22much more
57:23helping the poor
57:25and taxing the rich
57:26in the 1950s and '60s and '40s than we
57:29do today. And somewhere between that
57:31level and the current level
57:34might be more than enough if we just
57:36started
57:37to adopt the policy of 1935 to 75, where
57:41the bottom quarter get a half percent a
57:44year richer than the average.
57:47And the top dogs
57:48get half a percent less each year
57:51than the average. That sounds pretty
57:53unthreatening. I think we would ease our
57:55way over several decades
57:57uh into a better place.
57:59>> If you were 33 now, my age,
58:01and you were trying to accumulate
58:03wealth,
58:04>> Oh god, I wish I was 33.
58:05>> Do you?
58:06>> It's such an exciting time.
58:07>> What would you give to be 33?
58:09>> I There's nothing I can give.
58:11>> No, but it would you I I find this
58:12funny. It's I heard someone ask a
58:13question like this the other day. They
58:14were They said like, "Would you give
58:17your your entire available net worth to
58:19be 33?"
58:20>> Yeah, I think
58:22everyone says yes. I mean, how did one
58:24get a net worth by
58:27by work and luck and
58:31creativity, all those good things.
58:33>> If you were 33 now in this moment in
58:35time, and your objective was And this is
58:37a bit of a crass objective, but I'm
58:39going to It sounds like it's a very
58:41one-dimensional objective, but if your
58:43objective was just to become rich now at
58:4533, what strategy would you deploy?
58:48Again, I'm going to take away your
58:49contacts.
58:51I'm even going to take away everything
58:52you know.
58:54So, you'd have to go on the journey of
58:55acquiring new information. What would
58:57you do?
58:58>> I think the simple appeal would be to
59:00get your tail into AI
59:02and and try and be a leader.
59:05Try and know more about everything in
59:07that area than the next guy.
59:09>> Mhm.
59:10>> Join [clears throat] a leading firm and
59:12uh
59:13and go for broke. You may end up
59:16encouraging
59:18the destruction of the human species,
59:20but
59:21you asked a simple question, and I give
59:22you what I think is the simple answer.
59:24>> And what I I there is you want to make
59:26sure you're riding a wave that's coming
59:28into shore and you're on the forefront
59:29of that incoming wave. Like we saw with
59:31the tech bubble, we saw with you know,
59:33we're now seeing with the AI bubble.
59:35So, it's really about
59:37acquire the most valuable information.
59:40>> Yes.
59:41And take lots of risk.
59:44Don't be conservative.
59:46>> And work hard.
59:47>> And work hard.
59:48And think outside the box.
59:51I mean, I think that the biggest
59:53deficiency
59:54uh most people is that they feel
59:56constrained
59:58uh to play the game by the regular
1:00:00rules.
1:00:01And to believe that experts
1:00:04and authorities know what they're doing.
1:00:06And and that as you know, probably, it
1:00:08just ain't so.
1:00:10>> What if I'm trying to invest? So, say
1:00:11that I've got $1,000 or $10,000 and I
1:00:15want to invest it somewhere that's going
1:00:16to
1:00:17not lose me money through all of these
1:00:19cycles of, you know, boom and bust.
1:00:22Cuz I'm I'm in you know, I I have a lot
1:00:24of people message me and ask me about
1:00:25investing because I interview lots of
1:00:27people about investing. I have my own
1:00:28investment fund as well.
1:00:30Um
1:00:31But what advice do you give for the
1:00:32average person that's looking to invest
1:00:34their salary or their wages?
1:00:36>> Buy a broad-based index of uh
1:00:39non-US equities.
1:00:40>> Non-US? That's really surprising to me.
1:00:42>> For um like 60% of your money.
1:00:45And then 5 or 10% in precious metals and
1:00:48uh
1:00:50if if it's convenient and sensible, hold
1:00:53hold a bit of real estate. And the rest
1:00:56I'd put in uh bonds.
1:00:58>> Okay, so 5 or 10% in things like silver
1:01:00and gold? A preference for either silver
1:01:02or gold?
1:01:04>> No.
1:01:05>> Um [clears throat] S&P 500? Now, you
1:01:07said non-US.
1:01:08>> Non-US.
1:01:09>> This is so interesting cuz everybody
1:01:10says invest in US stocks.
1:01:13>> Of course they do. They've been
1:01:14completely dominant for 20 years.
1:01:17Completely kicking ass around the rest
1:01:19of the world. And then
1:01:21in the last 12 months, emerging markets
1:01:23is up 65% now. The S&P has done much
1:01:26better than I would have guessed, but
1:01:28it's only 25.
1:01:30That's a lot less than 65.
1:01:32>> And I guess the strategy is quite
1:01:34important here as well, which is you're
1:01:35saying to hold these for a long time.
1:01:37Try not to buy and sell.
1:01:39>> And and try and look at where the cycle
1:01:41has been. And I can tell you, and you
1:01:43can see it for yourself, there has been
1:01:45an enormous cycle in favor of the S&P,
1:01:48in favor of the American market over the
1:01:50rest of the world. And do you think
1:01:53America is going to keep on gaining on
1:01:55the rest of the world?
1:01:56And of course you're going to say yes
1:01:57now, because that's
1:01:59that's the flavor of this market. We
1:02:02think that what is good today will
1:02:04continue being good indefinitely, even
1:02:06though history tells you that is
1:02:08absolutely not the case.
1:02:10We live in a world that tends to rotate
1:02:12from one to the other. We believe in a
1:02:14world that extrapolates today's
1:02:16conditions. And you can easily prove
1:02:17that. The stock market is not efficient.
1:02:19The stock market extrapolates today's
1:02:21conditions. If they are terrible
1:02:24in 1982, they will take crushed earnings
1:02:28and multiply it by seven times earnings.
1:02:31And then, in 2000, peak profit margins
1:02:35times, woo, 35 times earnings. They
1:02:37double count in the worst way. When
1:02:40times are good, you multiply it by a
1:02:42lot. That's another way of saying you
1:02:44extrapolate it into the distant future.
1:02:47>> You assume it's going to continue.
1:02:48>> And Keynes, of course, my hero, says,
1:02:50"Of course that's
1:02:52extrapolation is the convention you
1:02:54adopt, even though you know from
1:02:55personal experience that the world is
1:02:57not that way."
1:02:58>> You didn't use the word crypto
1:03:00when you're talking about investment
1:03:01strategies. How much crypto do you own?
1:03:03>> None.
1:03:04>> Have you ever owned any crypto?
1:03:06>> No.
1:03:07>> Will you ever own any crypto?
1:03:08>> No.
1:03:08>> Will you ever advise anyone to buy
1:03:10crypto?
1:03:10>> No.
1:03:12>> Why?
1:03:14>> I think it's a
1:03:16an unnecessary
1:03:18uh
1:03:19piece of uh
1:03:21nonsense.
1:03:22It facilitates nothing except criminals
1:03:25moving money
1:03:26so they can't be seen.
1:03:28It's not a store of value since it
1:03:30bounces around all over the place just
1:03:32down from 120 to 60
1:03:34because it felt like it. So, it's not
1:03:36stable. It's volatile as hell.
1:03:39It's not used conveniently as a medium
1:03:41of exchange. You can't go into a shop
1:03:43and use it easily.
1:03:45It does one thing
1:03:46very, very well.
1:03:48It's a means of speculating beautifully.
1:03:52>> Do you think Bitcoin's going to go to
1:03:53zero?
1:03:54>> Well,
1:03:55in the distant future, yes, it will
1:03:56certainly go to zero, but it may take a
1:03:58long time.
1:04:00And and, you know, in the distant
1:04:02future, everything goes to zero, so
1:04:05>> What about property as an investment?
1:04:07Because the first sort of reaction most
1:04:08people have when they have enough money
1:04:10to make an investment or to buy
1:04:12something is they buy a property as an
1:04:14investment asset. So, people go buy
1:04:16themselves a house, they'll move into
1:04:17it. We're kind of told that that's how
1:04:18you start to accumulate wealth is you go
1:04:20buy yourself a house.
1:04:22What do you think of that?
1:04:23>> It's hard to imagine how it could be a
1:04:25good decision
1:04:27when uh there's such an increasing
1:04:28fraction of people
1:04:30who can't afford it.
1:04:32And there is a political resistance, you
1:04:34know.
1:04:34>> Doesn't that just mean that the if, you
1:04:35know, if I buy one now and increasingly
1:04:38people can't afford one, doesn't that
1:04:39mean that my my house is going to be
1:04:41worth more in 10 years' time?
1:04:43>> No, if people can't afford it, there's
1:04:44no one bidding.
1:04:46And by the way, the population is going
1:04:48to decline.
1:04:50Young family formations are already
1:04:52declining in
1:04:54many of the richer countries.
1:04:56And if you have family formations
1:04:58declining and you have super expensive
1:05:01houses, what do you think is going to
1:05:03happen? Now, you could say, "Well,
1:05:04perhaps there will be a mysterious
1:05:06increase in family formations."
1:05:08And that the chronic baby bust that we
1:05:11maybe will talk about soon. Um, we'll
1:05:14stop.
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1:06:19This is something that I've made for
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1:06:22CEO audience are strivers, whether it's
1:06:24in business or health. We all have big
1:06:26goals that we want to accomplish. And
1:06:28one of the things I've learned is that
1:06:30when you aim at the big, big, big goal,
1:06:32it can feel incredibly psychologically
1:06:36uncomfortable because it's kind of like
1:06:37being stood at the foot of Mount Everest
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1:06:53home can accomplish any big goal that
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1:07:23diary.com.
1:07:25And if you want the link, the link is in
1:07:26the description below.
1:07:27Let's talk about the chronic baby bust.
1:07:31I've been hearing a lot in the news. I
1:07:32think there were some articles that
1:07:33actually came out this week in the New
1:07:34York Times that talked about the
1:07:36declining fertility rates and how young
1:07:38couples like me, I'm in a you know, I'm
1:07:41I'm engaged to a young woman who
1:07:44and me and me and her are trying to have
1:07:45a child now.
1:07:47Um it's not not always a straight line
1:07:50to having a child. Yeah, I think you're
1:07:51kind of sold the idea that it is, that
1:07:52you just have sex without a condom and
1:07:54then a baby appears, but um lots of
1:07:56young families and lots of my friends
1:07:58who are trying to have kids have gone
1:07:59for a couple of years
1:08:01trying and struggling to con- to
1:08:03conceive. So much so that after doing
1:08:05this podcast, I started telling some of
1:08:08my friends that I actually think it's a
1:08:09good idea to start freezing your eggs,
1:08:11embryos, sperm.
1:08:13Because if it is going to get
1:08:14increasingly harder, then there might
1:08:16need to be
1:08:17um medical interventions, IVF,
1:08:20um etc.
1:08:22for me and my friends.
1:08:23If we are if we you know, if we want to
1:08:25have families. But the the problem is as
1:08:26well at like 33 years old, um if you
1:08:29look at the data, you're not at your
1:08:30peak necessarily in terms of fertility.
1:08:32You're somewhere you're coming down the
1:08:34slope as a man. Um and but also as a
1:08:37woman.
1:08:38And so, you're kind of fighting time a
1:08:39little bit it feels like.
1:08:41>> Yeah, you are.
1:08:41>> And I think my partner feels the same
1:08:43way that we wish we were told a little
1:08:44bit earlier about family planning.
1:08:46And then I hear that about this fert-
1:08:48these fertility issues that apparently
1:08:49have been caused by toxins
1:08:52and that sort of chemicals in our
1:08:53environment. You have spent a long time
1:08:56thinking, writing, talking about this.
1:08:58>> Yes.
1:08:58>> I guess the first question is why? Why
1:09:00is a guy that's known for managing
1:09:01billions and billions and billions of
1:09:03hundreds of billions of dollars talking
1:09:04about fertility?
1:09:07And this sort of baby bust.
1:09:09>> Well,
1:09:10starting
1:09:1227 years ago with the
1:09:14foundation, we were committed to start
1:09:17thinking about everything to do with the
1:09:19climate. And and you're moving in the
1:09:22right circle then, because the next
1:09:24thing is we started to worry about the
1:09:26cataclysmic decline in insects. I don't
1:09:28know if you're aware of this, but
1:09:30insects appear to have dropped in
1:09:31biomass, the weight of the flying
1:09:33insects, by 50 to 75%.
1:09:36>> Really?
1:09:37>> In the last 60, 70 years.
1:09:40And E.O. Wilson, the famous ant man, he
1:09:43believed that you know, nature could
1:09:45handle
1:09:46the loss of humans easily, effortlessly,
1:09:49but it could not handle the loss of of
1:09:51insects. That insects are in in the
1:09:53sense, he felt,
1:09:55and and his fellow experts, he
1:09:57represented them as thinking the same
1:09:58way, that they Insects are the bedrock
1:10:01of nature.
1:10:02And if they start to go out of business,
1:10:04then the
1:10:05birds who feed on on them and the
1:10:07amphibians, they start to decline, which
1:10:09they have done also catastrophically.
1:10:12One thing leads to another, and the
1:10:15beetles are no longer
1:10:16recycling the forest floor, and
1:10:19eventually things won't grow, and
1:10:22no one to uh
1:10:24fertilize the plants, and the damage
1:10:26spreads, and he felt that eventually
1:10:28loss of insects would lead to a more or
1:10:30less complete failure of nature.
1:10:33And and
1:10:34we would inherit a planet that was no
1:10:36longer conducive to humans.
1:10:38We noticed that some of the same effects
1:10:41are felt uh by humans.
1:10:44And uh a report came out,
1:10:47Shanna Swan and Hagai Levine,
1:10:50I think it finished in 2011,
1:10:52and uh it made the case
1:10:54that uh sperm count had been dropping
1:10:57had almost halved since the first
1:11:00reports academic reports in 1970.
1:11:03So, I immediately said this has the
1:11:05feeling of something that is really
1:11:07important.
1:11:08We got to study the data and the results
1:11:11came out suggesting that the decline
1:11:13rate was accelerating. The decline rate
1:11:15this year is 2 and 1/2% a year. You
1:11:17don't have to be mathematically that
1:11:19literate to realize that a 2 and 1/2%
1:11:21decline in your sperm count every year
1:11:24is a disastrous level, a non-sustainable
1:11:27level, right?
1:11:28>> How long is that going to take for this
1:11:30my sperm to basically not work?
1:11:31>> As far as we can tell, our best guess
1:11:35is
1:11:36that in hunter-gatherer days we had 118
1:11:39million units per milliliter of sperm.
1:11:42And when the academics came in in 1970,
1:11:45uh
1:11:46it was down to about 100.
1:11:49And today it's 35.
1:11:51Okay?
1:11:52Also, the quality
1:11:54and the mo- motility they call it had
1:11:57also declined
1:11:59somewhat similarly.
1:12:01It turns out, luckily for us, that we
1:12:03were over-engineered at I like to say
1:12:05like a great Victorian bridge.
1:12:08Nature doesn't take any risks and and
1:12:11you have more than you need. And it it
1:12:13appears, again, a good guess is about 45
1:12:16million units
1:12:18is what you need to be able to get
1:12:20pregnant without any difficulty. And
1:12:22that was hit about 15 to 20 years ago.
1:12:25The number of young couples who needed
1:12:27help 15 or 20 years ago
1:12:30uh was nil, basically.
1:12:32And for this reason, that none of them
1:12:35had a a chronic lack of sperm count in
1:12:38round numbers.
1:12:40And now
1:12:42the World Health says it's about
1:12:4517%.
1:12:46Okay? 17% of young couples could use
1:12:48some help today.
1:12:50It which means that instead of, you
1:12:52know, just trying for a week or two or
1:12:54three or four or five or six you're
1:12:56trying for months and months.
1:12:58And
1:12:59everybody knows people now who fall in
1:13:02that category. Which is exactly what you
1:13:04would expect if you've gone from zero to
1:13:0617%.
1:13:07But this is the killer. Shanna Swan
1:13:10and my colleague and I kind of thought
1:13:12about this thing separately and
1:13:13independently and we
1:13:15we worked out doesn't take a great brain
1:13:19that in 20 to 25 years the young couple
1:13:22will need help. I mean this is tomorrow.
1:13:25You know this is not 200 years from now.
1:13:27In 20 to 25 years the average young
1:13:30couple will need help getting pregnant.
1:13:32>> Dr. Swan's projection indicates that if
1:13:35the current rate of decline continues
1:13:37unchecked the medium male sperm count is
1:13:41on track to hit zero
1:13:43by 2045.
1:13:46>> Wow, yeah.
1:13:49>> [laughter]
1:13:50>> That is
1:13:51that means the medium couple is not
1:13:53going to have children without a lot of
1:13:55help.
1:13:56>> It means half the male population will
1:13:59have zero viable sperm and the remaining
1:14:02half will be right on the edge of
1:14:05functional infertility.
1:14:06>> A few of them will still have plenty and
1:14:09maybe 10% who are really perfectly
1:14:12in decent condition.
1:14:13Because there's a huge distribution
1:14:15range today.
1:14:17You know there are there are people
1:14:18today who still have 200 million you
1:14:20know better than the hunter-gatherers.
1:14:22But it's uh
1:14:25>> And what is causing this and how do we
1:14:27stop it?
1:14:28>> Shanna would say the environment around
1:14:31you
1:14:32of mainly plastics.
1:14:33Plastics are leaching
1:14:36uh toxins and the particles of plastics
1:14:38you have in your brain and in your body
1:14:42which we now know is quite substantial
1:14:44are also leaching toxins.
1:14:48And these toxins are what they call
1:14:50endocrine disruptors. They mess with
1:14:51your hormones.
1:14:54You should expect them to lower your
1:14:56fertility.
1:14:57And yet, the people who specialize
1:15:00in fertility problems
1:15:02and write books about it, none of them
1:15:05mention toxicity.
1:15:06They mention the hundred perfectly solid
1:15:08reasons why people are choosing
1:15:11uh to have fewer children.
1:15:12>> Endocrine disrupting chemicals like
1:15:14phthalates,
1:15:16>> Like phthalates.
1:15:17>> which are found in cosmetics, shampoos,
1:15:18food packaging, etc. They actively lower
1:15:21testosterone production in male fetuses
1:15:22during the first trimester, permanently
1:15:24stunting reproductive reproductive
1:15:26capacity before birth.
1:15:29>> Yes.
1:15:29>> BPAs, which are um what they call the
1:15:32biphosphonates?
1:15:34>> Yes. Something like that.
1:15:35>> Used to make plastics hard, line tin
1:15:38cans, and coat thermal store receipts.
1:15:41Um they are synthetic estrogens. They
1:15:42flood the male body with female hormones
1:15:44and signals crashing sperm count and
1:15:46motility.
1:15:47PFAs, forever chemicals used in nonstick
1:15:50pans, teflons, waterproof rain jackets,
1:15:52and stain resisting carpets. They break
1:15:55down in nature, accumulate in human
1:15:57blood, and are directly linked to lower
1:15:58sperm volume. And then the microplastics
1:16:00you talked about, the chosen chose
1:16:02Trojan horse. One of the shocking things
1:16:04that I read was that it's been
1:16:05discovered that they are physically
1:16:06embedded in human placentas.
1:16:08>> Yes. Isn't that amazing?
1:16:10>> Breast milk and human testicles. And
1:16:12there was a major study, I think we all
1:16:13heard about in 2024, that found
1:16:15microplastics in 100% of human
1:16:19testicular tissues tested.
1:16:22100%. And lastly, biological stresses.
1:16:24So, me and you being sat down on these
1:16:26chairs,
1:16:27heats our testicles to a point where the
1:16:29sperms die. Heated car seats, hot
1:16:31laptops, they actively cook the sperm.
1:16:35And lastly, obesity.
1:16:37>> Yes. And of course, smoking you, which
1:16:39somehow slipped through the net.
1:16:41>> Yeah.
1:16:41>> But um
1:16:42there is a whole other branch,
1:16:44pesticides on your food. Now, if you
1:16:46give me time, I'll tell you about these
1:16:48two little studies.
1:16:50They're very small, and you might ignore
1:16:52them except they were done by Harvard
1:16:54and Mass General, which is candidate for
1:16:56the best hospital in America.
1:16:59And, uh they had a clinic for people
1:17:02having problem getting pregnant.
1:17:04And, uh they they ran it out of that.
1:17:07They had 180 men.
1:17:09And, they got them to self-report on
1:17:11what they were eating. Were they eating
1:17:12the dirty dozen? Were they eating melons
1:17:15and bananas that have lots of
1:17:17protection?
1:17:18At the end of uh 6 months,
1:17:22the the guys who reported to eat the
1:17:24least bad
1:17:25versus the quarter that ate the worst,
1:17:28there was a doubling of sperm count. Can
1:17:30you believe it? At the top category, the
1:17:32more fruit and veggies you ate, the
1:17:34better your sperm count. In the bottom
1:17:36quartile, the more they ate, the worse
1:17:38their sperm count.
1:17:39It was a dramatic result, but two to one
1:17:42between the top and the bottom. And,
1:17:44then 2 years later, they did a very
1:17:45similar study with women who were having
1:17:47trouble.
1:17:49And, at the end of their 9 months of
1:17:51self-reporting, the ones who ate the
1:17:53least badly had 68% successful live
1:17:56births, bearing in mind this was a
1:17:58fertility clinic, and the bottom
1:18:00quartile 38%. So, once again, nearly
1:18:03double.
1:18:04I mean, and and it's life and death. I
1:18:06mean, these are really important. And,
1:18:07this was only based on what they ate.
1:18:11Because pesticides are full of these
1:18:14toxins, and they are delivered straight
1:18:17into your body. You eat the damn things.
1:18:19It's not just they're on the surface.
1:18:21You can wash some of that away, but
1:18:22they're impregnated part of the
1:18:24structure of the berry.
1:18:27Berries,
1:18:28apples, pears, peaches,
1:18:31and finally,
1:18:32um uh spinach uh are really bad and are
1:18:34the top end. The bananas and the
1:18:36oranges, and the melons are uh fine. So,
1:18:40if you eat these damn things that
1:18:42designed to kill our cousins, the
1:18:44insects, and and the weeds,
1:18:47and the funguses, why would you expect
1:18:49them not to do a terrible job on humans?
1:18:51And we stuff them in our system.
1:18:54And the fetus, it turns out, is 100 to
1:18:571,000 times more vulnerable
1:19:00than we are out in the out in the world.
1:19:03For example, if your mother smokes,
1:19:05it's going to do about the same damage
1:19:08as if you smoked for the rest of your
1:19:09life.
1:19:10>> Hm. Wow.
1:19:12>> And you think about what the fetus is
1:19:13plugged into the system, and how it's
1:19:16forming everything. It doesn't seem the
1:19:18most unreasonable thing that it would be
1:19:19much more sensitive. And there are
1:19:21people out there
1:19:23fussing quite reasonably about the first
1:19:251,000 days of life.
1:19:27But actually, that is nothing like as
1:19:30important
1:19:32as the 270 days in the womb.
1:19:35>> Atrazine.
1:19:37Have you heard of atrazine?
1:19:38>> have.
1:19:38>> Atrazine, um referred to as the chemical
1:19:41castrator. It is the second most widely
1:19:43used herbicide in the United States,
1:19:45sprayed heavily on things like corn and
1:19:47sugar canes.
1:19:48And there was this crazy study which was
1:19:50peer-reviewed out of UC Berkeley that
1:19:53showed exposure to atrazine at levels
1:19:56below the EPA's considered safe for
1:19:59drinking
1:20:01um levels, completely chemically
1:20:03castrated male frogs, turning 10% of
1:20:07them into fully functional females
1:20:10capable of laying eggs. In humans, it is
1:20:13linked to severe drops in sperm motility
1:20:15and testosterone.
1:20:16>> And yet, we avoid the topic.
1:20:19We avoid the topic because it's
1:20:21it's pessimistic. We're not fighting the
1:20:23data.
1:20:24>> We just don't want to talk about it.
1:20:26>> want to talk about it. We don't want to
1:20:27talk about bear markets.
1:20:29We don't want to talk
1:20:31about bad climate changes, even though
1:20:34it's bludgeoning us. This year could be
1:20:36the worst
1:20:38hot year
1:20:40in history.
1:20:41We are set up
1:20:43because of the accident of the El Niño
1:20:46to have perhaps the worst droughts and
1:20:48the hottest weather ever recorded,
1:20:51starting about now.
1:20:53So, brace yourselves. But, we don't want
1:20:54to talk about that. We don't want to
1:20:56talk about toxicity. We don't want to
1:20:58talk about running out of resources. Oh,
1:21:00we just don't do bad news. And I have
1:21:03never seen anything like this, this
1:21:05fertility thing, where the data is
1:21:07horrific. The baby bust is measurable.
1:21:11The sperm count is one of the few things
1:21:13you can really measure. Do they really
1:21:15think if you have declining sperm count,
1:21:17the future is great?
1:21:19Do they really think that the economy
1:21:20will function
1:21:22if the number of 20-year-olds entering
1:21:24the market starts to drop like a stone?
1:21:26In Japan, you know what their
1:21:2720-year-old is? It's 50% of what it was
1:21:31in 1948.
1:21:32>> What is 50%?
1:21:32>> 50%. Not down 15 or 3.5, 50% less.
1:21:37>> 50% less 20-year-olds?
1:21:39>> 20-year-olds that drive the market, that
1:21:41offer themselves for military service.
1:21:43>> What do we do about this?
1:21:44>> We have two things.
1:21:46We've got to
1:21:47detoxify the world, which is
1:21:50intellectually easy. You ban poisonous
1:21:53chemicals.
1:21:54And we've made in the EU
1:21:57pretty good start.
1:21:58My favorite example and everybody's
1:22:00favorite example is cosmetics.
1:22:02Cosmetics, you don't actually eat it,
1:22:04but you rub it on your skin, which is
1:22:05the second worst thing to do.
1:22:08And there are 10,000 chemicals in
1:22:10cosmetics.
1:22:12And the EU has banned 1,500. If they ban
1:22:14the right 1,500, that could be 3/4 of
1:22:17the battle, right? Canada's banned 550.
1:22:20And the US has banned 12. I am not
1:22:23kidding you.
1:22:24So, The thing about toxicity is it is
1:22:27regional. If one country if Denmark or
1:22:30the EU or the UK wants to look after its
1:22:32chemicals, they will live longer and
1:22:34have better health. If the US wants to
1:22:37put the corporations first, they will
1:22:39have shorter lives. Do you know the life
1:22:41expectancy difference between the US and
1:22:44Sweden has gone from 2 years to 6 years
1:22:46in the last 70 years?
1:22:48I wrote in my quarterly letter my estate
1:22:50would be willing to bet you that in 50
1:22:52years it'll be 8 or 10.
1:22:54>> I don't quite think people in the United
1:22:55States realize the difference in the
1:22:59products they consume here versus other
1:23:01parts of the world. And you know,
1:23:03>> No, absolutely not.
1:23:04>> Brits fly over here and actually we had
1:23:06my my barber my my barber Damon and he
1:23:08flew over here to give me a haircut last
1:23:09week. He said, "Oh gosh, I don't feel
1:23:11good." He said, "I went and got some
1:23:12food here and I really just don't feel
1:23:14good." And he says, "Every time I come
1:23:15over here I don't feel good." And me and
1:23:16my team we used to fly over here before
1:23:18I moved here for a couple of weeks a
1:23:19year to film the show and whenever we'd
1:23:21fly back not only would I be much
1:23:22fatter, um but we'd all feel a little
1:23:24bit more like sluggish, is the way I'd
1:23:26describe it, from eating the food here.
1:23:28And it almost felt quite clear that
1:23:29there's like something in the food that
1:23:31our bodies
1:23:32just isn't used to in the UK. And when
1:23:34you look at the toxicity of the United
1:23:37States versus Europe, it's quite clear.
1:23:40I mean, the US currently permits the use
1:23:41of 85 agricultural pesticides that are
1:23:44completely banned in the EU, China and
1:23:47Brazil. The US sprays over 300 million
1:23:51pounds per year of pesticides that are
1:23:53deemed too dangerous to be legally used
1:23:55in Europe, including that one I said
1:23:58about the frog's called atrazine.
1:24:00>> atrazine
1:24:01>> Which the EU banned over two decades
1:24:03ago. We look at cosmetics, which you
1:24:05were talking about then, what you put on
1:24:07your skin obviously goes into your
1:24:08bloodstream and so the EU has banned or
1:24:10heavily restricted over 1,300 chemicals
1:24:13in cosmetics and personal care products
1:24:15due to toxicity and hormone disruption.
1:24:18The US and the FDA has banned 11. In
1:24:21terms of food, the US allows potassium
1:24:23bromate, which is a known carcinogen,
1:24:26cancer-causing, used to make fluffy
1:24:28dough bread, and BHA
1:24:31{um} / BHT, which are preservatives
1:24:33linked to hormone disruption. Both are
1:24:35strictly banned from human consumption
1:24:37in the UK and EU and Canada and China.
1:24:39And lastly, the US {um} allows titanium
1:24:43dioxide, used to make candy smell like
1:24:45Skittles bright white,
1:24:47and synthetic dyes like red 40, which
1:24:49require strict warning labels or
1:24:52outright bans in Europe due to DNA
1:24:54damage and neurodevelopmental issues in
1:24:57kids. I'll give you one more. A recent
1:24:59US Geological Survey found that at least
1:25:0245% of all US tap water is contaminated
1:25:06with PFAs, those forever chemicals we
1:25:08talked about earlier, the very chemicals
1:25:10directly linked to crashing sperm counts
1:25:12and testicular cancer. The US has
1:25:14historically allowed PFAs levels in
1:25:17drinking water
1:25:19drastically higher than the EU, the
1:25:21United the European Union
1:25:23considers safe.
1:25:24>> Let us just say that the EU is forever
1:25:27giving exemptions and extensions and is
1:25:30far from perfect and has a lot of
1:25:32corporate pushback. And uh it's just
1:25:34much less bad than the US.
1:25:37>> And the US has worse life expectancy.
1:25:39>> It does, and it's the only rich country
1:25:41in the world where 15 years ago they had
1:25:44the same life expectancy as they have
1:25:45today.
1:25:46>> One um actionable piece of advice for
1:25:48anyone listening that might find this
1:25:50all quite um
1:25:52overwhelming cuz you know, lots of
1:25:54things around us from receipts to the
1:25:56pans we use to
1:25:57range jackets contain these chemicals,
1:26:00is there are apps out there
1:26:02where you can scan the chemicals in the
1:26:05foods that you're buying to check if
1:26:07they contain these endocrine disrupting
1:26:09these hormone disrupting chemicals. I'm
1:26:11not affiliated [clears throat] with any
1:26:12of them, but there's one called Yuka,
1:26:14YUKA, that I know is very easy for sort
1:26:17of everyday scanning of products. You
1:26:18can just scan the barcode and it'll tell
1:26:20you it'll give it a rating score out of
1:26:21100. There's EWG's Healthy Living
1:26:25um app which is the scientific gold
1:26:26standard run by the Environmental
1:26:28Working Group a major toxic chemical
1:26:30watchdog. You can scan barcodes or
1:26:31search for food, cleaning supplies or
1:26:33cosmetics. There's Think Dirty as well
1:26:35which is great for cosmetic shampoos and
1:26:37skin care. It exposes the toxic truth
1:26:39hiding in beauty products. Um and then
1:26:41there's Clear Ya which is Clear Ya. Best
1:26:44for online shopping. It's an app in your
1:26:46web browser and instead of scanning
1:26:48barcodes in your house
1:26:50while you're shopping online, it's so if
1:26:51you add a say like a shampoo or lotion
1:26:53to your Amazon or Target or Walmart
1:26:54basket, it automatically pops up with an
1:26:57alert telling you about the ingredients
1:26:59list that is within those chemicals. But
1:27:01but I think that gives something a
1:27:03little bit actual and arms you with at
1:27:05least a tool to navigate this crazy
1:27:06environment. And obviously AI is great
1:27:07at this as well. You can take pictures
1:27:08of things and ask it questions.
1:27:10>> And what we really need is a kind of
1:27:11green Amazon where everything is
1:27:13guaranteed food, bed, clothes,
1:27:16everything.
1:27:18And that would be very handy indeed.
1:27:20Someone you could trust that would
1:27:22absolutely guarantee the whole line of
1:27:24products that you would order. Not
1:27:26impossible and I think done well and
1:27:28someone could make money at it.
1:27:30>> What would advice would you give to your
1:27:31kids on a personal level if they're
1:27:32trying to stay healthy in a toxic world?
1:27:35>> Simple advice and I know you like this
1:27:38is pregnant women are much more
1:27:40important than anybody else in this
1:27:42field.
1:27:43If you could persuade pregnant women A
1:27:46to have no cosmetics, save a lot of
1:27:47money, no cosmetics for 9 months and
1:27:50then B invest some of that money from
1:27:52your cosmetics or all of it in buying
1:27:55organic berries if you have to have
1:27:58berries, apples, oranges, peaches
1:28:01what they call the dirty dozen here.
1:28:03If you did that
1:28:05I think as much as half of all the
1:28:07trouble disappears.
1:28:09And that's a huge fraction and it's
1:28:11easily acquired.
1:28:13You know, I I I addressing the 100
1:28:15things around in your environment, you
1:28:17have to get to that.
1:28:19Typically, if you're lucky, you do one
1:28:21thing after another. You get the gas
1:28:22stove first, which is really noxious,
1:28:25and then you work your way the black
1:28:27plastics, the Teflon frying pan. You
1:28:30work your way around it. Compared to
1:28:32that,
1:28:33no cosmetics, no bad food,
1:28:38or make it organic. That's a piece of
1:28:41cake. That is easy. It will save you
1:28:44huge amount that you will never
1:28:45appreciate because you'll never know how
1:28:47much better your children are than they
1:28:49would have been.
1:28:50>> Mhm.
1:28:51>> But, it's not only your children, by the
1:28:53way.
1:28:54For women, you know, you're talking
1:28:56about in particular because of the eggs,
1:28:59they are Every egg is all there in the
1:29:01womb.
1:29:03And then it goes on to your
1:29:04grandchildren, we thought. At least we
1:29:07could prove two generations. And and and
1:29:09a recent study suggests it might be many
1:29:11more generations than two. So, you got
1:29:15some of these chemicals
1:29:16impregnated in your system, and your
1:29:18children pay the price, and your
1:29:20grandchildren, and perhaps even
1:29:23quite a few generations after that.
1:29:26>> I also think it would be great if
1:29:28Western governments around the world
1:29:30made the costs of
1:29:32both child care and but also fertility
1:29:36treatments
1:29:37significantly lower.
1:29:39>> And they will, of course.
1:29:40>> You know, I had a couple of
1:29:41conversations on this podcast with very
1:29:43successful women, including Ronda
1:29:44Rousey, who was in tears because she was
1:29:46on a
1:29:48I think it's her [laughter] fifth or
1:29:49sixth round of IVF treatments, and she
1:29:51just found out just before she walked
1:29:52into the studio that it hadn't gone
1:29:54well.
1:29:55And watching her cry
1:29:56about it and get very emotional meant
1:29:58that that that day I walked out of this
1:30:00room and like called a lot of the people
1:30:01in my life that I know are
1:30:03you know, in the region where fertility
1:30:05starts to decline, and really encourage
1:30:08them to start thinking if they if that's
1:30:10what they want in their lives about
1:30:11family planning, which is like getting
1:30:13your eggs frozen or your embryos frozen.
1:30:15And me and my partner actually went and
1:30:16did it. We got our embryos frozen, which
1:30:19was a you know, it's it's not it's it's
1:30:20both expensive, extremely expensive,
1:30:23especially here in the United States,
1:30:25and difficult.
1:30:26>> And psychologically destructive. Brutal.
1:30:28>> You know, we you know, me every day for
1:30:32a couple of weeks injecting her with
1:30:33with this this these chemicals and the
1:30:36the hormonal roller coaster that she had
1:30:38to deal with and all of that, but for us
1:30:42the alternative was worse,
1:30:44which was never being able to have
1:30:45children because it's difficult and
1:30:47there's all these toxins in our
1:30:48environment and and so on and so forth.
1:30:51And so I then became a little bit of a I
1:30:52guess a bit of a bit preachy within my
1:30:54within the people the people in my life
1:30:55that I love a lot about family planning
1:30:58cuz we kind of all thought we could just
1:30:59think about it later.
1:31:01We're all kind of 35 and we thought,
1:31:02"Yeah, we'll think about that later."
1:31:04Um but it turns out not to be the case
1:31:06for many people.
1:31:07>> If you'll allow me to go back, you asked
1:31:09an important question. What do we have
1:31:11to do? And I said we have to detoxify
1:31:13the system and then we both got off into
1:31:15this frenzy of of attacking chemicals,
1:31:19which we should anyway, but it's
1:31:20intellectually easy. Ban the suckers,
1:31:23okay? Now, putting pressure on the
1:31:25corporations to back off so the
1:31:27governments can do it would be a good
1:31:30idea, not easy. Corporations have
1:31:32enormous power, unprecedented power in
1:31:34the US,
1:31:35but but very substantial power in the in
1:31:38the EU and the UK also. But we have to
1:31:41get them to back off. We have to start
1:31:43banning these damn things, otherwise no
1:31:46children. But secondly,
1:31:48and much more difficult,
1:31:50is we have to detoxify capitalism.
1:31:53We have to slowly but surely
1:31:56turn our capitalist societal norms into
1:32:00much more family-friendly,
1:32:02children-friendly.
1:32:04Over the next several generations,
1:32:06we have to end up with a society that
1:32:09realizes that 2.1 healthy, well-educated
1:32:13children is a part of the commons. You
1:32:15may not have any children.
1:32:16>> you mean by that, sorry? 2.1?
1:32:18>> 2.1 is the number of children it takes
1:32:20for a rich society to have a steady
1:32:23population.
1:32:24>> Per couple?
1:32:25>> Per couple. If you have less than 2.1
1:32:27per couple,
1:32:29you fairly rapidly go out of business.
1:32:30If you have more than 2.1, you fairly
1:32:33rapidly end up with so many people
1:32:35you're standing on each other's
1:32:37shoulder. The commons are things like
1:32:39common land in the old days that anyone
1:32:43could put their sheep on. And what
1:32:44tended to happen is everyone put more
1:32:46sheep than they could stand, and they
1:32:48pretty soon it was
1:32:49it had no grass on it. Known as the
1:32:51tragedy of the commons.
1:32:53And
1:32:55we all need
1:32:57clean air,
1:32:59clean water,
1:33:01fertile soil,
1:33:03and 2.1 healthy, well-educated children.
1:33:06Without any of those, society fails.
1:33:09All of them have to be treated as group
1:33:12responsibility. So, the whole society,
1:33:15the whole village
1:33:17has to be in a way like a kibbutz
1:33:19eventually. You have to put everything
1:33:21behind making it doable
1:33:24to have children because the long list
1:33:26of economic and social reasons, as well
1:33:29as toxin reasons, why people can't have
1:33:322.1 children is getting so long and so
1:33:34dangerous. And nothing yet has worked. I
1:33:38mean, they've tried, you tell me, 200
1:33:40different things around the world.
1:33:42Several percentage points of GDP in one
1:33:44or two cases.
1:33:46And nothing yet has
1:33:49seemed seen a permanent uptick in in
1:33:53baby production.
1:33:54>> For the average person listening right
1:33:56now, Dave who drives a taxi or Jenny who
1:33:58works as a receptionist or um Clive who
1:34:01is a nurse,
1:34:03what is the most important thing we
1:34:05haven't talked about that we should have
1:34:06talked about as it pertains to their
1:34:08life today?
1:34:10>> I think they have to brace themselves
1:34:13for a tougher times ahead
1:34:15than they would have they expected.
1:34:18And they're beginning to get the point.
1:34:20Life for the last 10 or 20 years has
1:34:22been tougher than than they perhaps
1:34:25expected as children or or than other
1:34:27people expected for them.
1:34:29Part of that is politics. Part of that
1:34:33is equality. But the net effect of them
1:34:35is times are tougher. It is more
1:34:39difficult
1:34:40to buy a house or afford to rent.
1:34:43And and jobs are getting scarcer.
1:34:47It's likely to get worse.
1:34:49>> What does brace yourself mean for them?
1:34:51Cuz brace yourself sounds like you
1:34:54But does it mean
1:34:55>> Plan your life as if times will not be
1:34:57easy.
1:34:58>> Okay.
1:34:59>> And do not
1:35:00build up a little reserve of of cash.
1:35:03Of course my advice to
1:35:06other people is and and get yourself a
1:35:09useful job. Something that will in a
1:35:12larger sense pull your weight in
1:35:14society.
1:35:15>> Upskill, change skills, learn something
1:35:18>> mechanical
1:35:19fixing, repairing
1:35:21>> Things that
1:35:21>> engineering
1:35:22>> Things that will need humans.
1:35:23>> And and research, science in general.
1:35:25>> Make friends.
1:35:27>> Make friends.
1:35:28Make sure you're living in in a a tight
1:35:31society if you can. Very difficult
1:35:33today, obviously.
1:35:34>> Would you be thinking about the country
1:35:36you live in at this moment in time?
1:35:37>> Absolutely.
1:35:38>> Really? Is there any countries you
1:35:39wouldn't live in?
1:35:41>> [sighs and gasps]
1:35:42>> If you were Dave or Jenny?
1:35:43>> I I think I have to refuse to answer
1:35:46this on the grounds that it might tend
1:35:47to incriminate me.
1:35:48Um
1:35:49>> Oh, okay. So you're saying don't live in
1:35:50the United States?
1:35:52>> Well, I have
1:35:53American children and grandchildren.
1:35:56>> Why not the United States?
1:35:57>> It holds out too much chance that the
1:36:00social contract is
1:36:01is
1:36:02>> [snorts]
1:36:02>> dissolving.
1:36:04You know, the thing about Japan and that
1:36:06my joking rule 21 in investing is never
1:36:08extrapolate from the Japanese. They are
1:36:10extremely different in every way.
1:36:13But one of the ways they're different is
1:36:14they have this amazing social contract.
1:36:17The thing that really upsets the
1:36:19Japanese is if they're put in a position
1:36:21where they can't act in a socially
1:36:23responsible way.
1:36:24>> When you say social contract, what does
1:36:26that mean?
1:36:26>> It means an agreement that I will behave
1:36:29in a way that helps my neighbors and the
1:36:31society that I'm doing what people
1:36:33expect me to do. I'm not going to
1:36:35misbehave.
1:36:36>> And you think that's not the case here
1:36:37in the United States?
1:36:38>> I think the case here is that people are
1:36:40doing what they think is best for them
1:36:42and their family and screw everybody
1:36:44else, really.
1:36:46When I arrived in America, corporations
1:36:47had this sense that they owed something
1:36:50to the community they operated in, the
1:36:52city they operated in. They They'd build
1:36:55the stadium, they'd do this, they'd
1:36:57they'd be part of the community.
1:37:00Now they're not. They're all
1:37:03in a way cold-blooded, profit-maximizing
1:37:05international enterprises.
1:37:07>> And why is that a bad place to live? Cuz
1:37:09you're saying, you know, you probably
1:37:10wouldn't recommend Dave or Jenny living
1:37:12in the United States. Why would that be
1:37:14a bad place for them to be? What
1:37:15happens? What's the What's the
1:37:16downstream impact of that?
1:37:18>> That your neighbors aren't as interested
1:37:20in you and your well-being.
1:37:21>> Fine. I don't I won't talk to my
1:37:23neighbor.
1:37:24>> And that's a lonely place to be. And
1:37:26when you're in trouble,
1:37:28you're in
1:37:30serious trouble.
1:37:31Uh because the safety net here is very
1:37:34ineffective. There's a a measure that I
1:37:36think is probably the single most
1:37:38important measure of civilization, and
1:37:40that is maternal mortality. How many
1:37:43people die in childbirth? You know, in
1:37:45Nigeria out of 100,000, it's 480, give
1:37:49or take.
1:37:50And uh
1:37:52in America, in in the
1:37:55black population,
1:37:57it's uh 44.
1:37:59In the whole population, it's like 21 or
1:38:0320.
1:38:04Curiously, in the
1:38:07American Asian population, it's 13.
1:38:10And then, you go down the list,
1:38:13and in Britain, it's five.
1:38:17In Germany, it's four.
1:38:19In Sweden, it's 2.1. In Norway, it's
1:38:22zero. There were no mothers who died
1:38:24last year.
1:38:25>> Hm.
1:38:25>> Or the year before. What better
1:38:27definition of civilization than looking
1:38:30after the mothers giving birth? How is
1:38:32it possible that a country
1:38:36more or less the richest in the world,
1:38:39it's not just that they're the worst in
1:38:41the rich world, it's that
1:38:44they are 50% worse than the next worst.
1:38:4850% more mothers die here than in the
1:38:51second worst country in the developed
1:38:53world. How is that possible? The answer
1:38:55is it happens.
1:38:57And um it's because
1:39:00the inequality is so extreme in the
1:39:02medical system
1:39:04that if you don't have lots of money,
1:39:05you're quite likely to die in
1:39:06childbirth. I mean,
1:39:08Now, of course, the numbers are not
1:39:09huge. 20 out of 100,000 is not uh
1:39:13but it's but it's a terrible contrast.
1:39:15>> It's a sign of something.
1:39:17It's a sign of something else as well.
1:39:19>> It's a sign of whether people are
1:39:21It's a sign of the social contract.
1:39:22>> So, where's a good place to live then,
1:39:24if not here?
1:39:25>> Denmark, Japan.
1:39:28Uh even France, Germany. The UK has a
1:39:32little bit of the American disease, but
1:39:35not nearly as much.
1:39:36>> So, if your kids came to you and said,
1:39:38"Dad, we're thinking of uh leaving the
1:39:39United States. Should I move?
1:39:41Should I Should I move out of the United
1:39:43States?
1:39:44>> Yeah, I I would say that's a perfectly
1:39:46reasonable thing to consider.
1:39:49And where are you going and why and
1:39:51what's your
1:39:52>> I'm thinking of going to Denmark, Dad.
1:39:54>> Well,
1:39:55if they'll have you. Uh
1:39:57No, uh
1:39:59in the things that really matter, life
1:40:01expectancy, health,
1:40:04safety nets,
1:40:05uh murder rates,
1:40:07uh mortality rates,
1:40:10and everything that really matters, yes,
1:40:12they're they're day and night better.
1:40:15In the things that don't really matter,
1:40:16but look really splashy,
1:40:18we have enormous quantities of uh wealth
1:40:21created
1:40:22that go to a relatively small fraction
1:40:24of the people.
1:40:26And that dazzles in terms of the average
1:40:28because
1:40:30um that's how the numbers work.
1:40:33If you look at how well-off the bottom
1:40:35quartile are,
1:40:37America doesn't score well at all.
1:40:40>> Jeremy, we have a closing tradition
1:40:42where the last guest leaves a question
1:40:43for the next guest not knowing who
1:40:44they're leaving it for. The question
1:40:45left for you is, if you could not fail,
1:40:49what would your next goal be
1:40:52that you would set for yourself?
1:40:55>> There There was a book written
1:40:57in the 1960s called Silent Spring.
1:41:01Carl Carson, I think her name was.
1:41:03And it changed for a quite a number of
1:41:05years it it it did what books never do
1:41:08really it
1:41:10it uh became a political monster and
1:41:13everyone studied it and it had an
1:41:15effect. It changed the game.
1:41:17I would uh like to write something about
1:41:22toxicity and and social contract really.
1:41:25Particularly nurturing a family. We
1:41:27We've got to find in the end a community
1:41:30that encourages children. The downside
1:41:33of the
1:41:34brutally efficient capitalist system
1:41:36that we have. It's focus on
1:41:39financial achievement and so on.
1:41:42And
1:41:43very little emphasis on community and
1:41:46child-rearing and so on. If we don't we
1:41:48we fail as a society pretty quickly. We
1:41:51have to detoxify. We have to encourage
1:41:55to create an environment where people
1:41:57want to have children.
1:41:59>> [clears throat]
1:41:59>> If I could write a book
1:42:01that would be
1:42:03would would pull a silent spring, I
1:42:04would sit down tomorrow and start it.
1:42:07>> The making of a Parma bear.
1:42:10>> Parma should be in inverted commas,
1:42:12really.
1:42:13>> The perils of long-term investing in a
1:42:15short-term world.
1:42:19By Jeremy Grantham and Edward
1:42:21Chancellor.
1:42:23Who is this book for?
1:42:24>> Oh, people who have a interest in the
1:42:26stock market. It has a little bit of
1:42:28climate change and toxicity.
1:42:31My my co-rider is a professional and he
1:42:33tried to limit me quite sensibly.
1:42:36Feeling that our main market was
1:42:37investors who would be turned off by too
1:42:40much of the stuff we've been talking
1:42:42about.
1:42:43>> You cover things also like economics,
1:42:46value investing, being a bear, and
1:42:47predicting a bubble, and what to do
1:42:48about all of those things. But it's
1:42:50really a useful counterintuitive not
1:42:52counterintuitive, but it's a it's a
1:42:54frame of thinking that will help you be
1:42:56more realistic especially when
1:42:57psychology is prone to take over and
1:42:59make you wildly recklessly optimistic.
1:43:02>> And and be more confident in your
1:43:04judgment.
1:43:06Big big companies cannot advise you.
1:43:10It's just suicidal for their business.
1:43:12So you are on your own. Look at the
1:43:15data. A bubble is not hard to see. There
1:43:18is this kind of plane and then there's a
1:43:20Himalayan peak
1:43:22which eventually goes back.
1:43:24>> And I mean that's exactly what we're
1:43:25seeing.
1:43:25>> That's exactly what history looks like.
1:43:29Have the courage to look at that, make
1:43:31your own conclusion, get out of the
1:43:33dangerous most dangerous part,
1:43:36and and do it now.
1:43:38Don't wait for help because no help is
1:43:40coming.
1:43:43Large enterprises almost never get the
1:43:46big turning points
1:43:48because they can't take the career risk
1:43:50involved.
1:43:51And every big corporation needs a leader
1:43:53who has political skills.
1:43:56And the And the central political skill
1:43:57in life turns out to be never be wrong
1:44:00on your own.
1:44:02This is again Keynes.
1:44:04You know, you can be wrong in company,
1:44:06you can jump off the cliff together, you
1:44:08will never lose your job because of
1:44:09that.
1:44:11But if you do anything on your own,
1:44:12sooner or later you will get it wrong.
1:44:15And quote, you will not receive much
1:44:17mercy.
1:44:19>> Jeremy, thank you so much. Thank you for
1:44:22all that you do. Um you traverse so many
1:44:23subjects. It's It's absolutely
1:44:25fascinating and you You've made me think
1:44:27about so many things. I've actually
1:44:28written down a bunch of ideas. You sent
1:44:29me taking some photos then. Those are
1:44:31actually ideas that I want to remember.
1:44:33>> Yeah, that's what I do. Screenshot city.
1:44:35>> Yeah, so I took I just wrote things down
1:44:37you were saying and then I was like I
1:44:37need to remember that later for a bunch
1:44:39of things, businesses, friends, family,
1:44:41etc.
1:44:42Um and I think that's the testament to
1:44:44how broad and curious and wise you are.
1:44:46>> Going back to question one or two, the
1:44:49billionaire bit,
1:44:50uh sometime around the end of this year
1:44:52we will actually have written checks for
1:44:54a billion dollars
1:44:56to the climate change world.
1:44:58>> It's It's a wonderful thing and there's
1:44:59you know this particular moment in time
1:45:01because of the politics, climate change
1:45:02is a subject that's falling off the
1:45:03radar.
1:45:04>> It is.
1:45:05>> Uh it's
1:45:06being mentioned less in earnings calls.
1:45:07It's
1:45:07>> But this year will be so disgustingly
1:45:09hot from now on, I suspect.
1:45:11>> Disgustingly hot.
1:45:12>> Hot. We could have from now on the
1:45:14hottest 12 months from now to this time
1:45:16next year that we have ever had in
1:45:18history.
1:45:20Here, there, and everywhere.
1:45:21>> Well, I'm glad we've got voices like
1:45:22yours
1:45:23um lending their ideas and wisdom to
1:45:25these conversations and it's been an
1:45:26honor and a privilege to to you. Your
1:45:28book, The Making of a Manager, Baron, to
1:45:29link it below
1:45:31for everyone to buy it themselves.
1:45:33Jeremy, thank you. YouTube have this new
1:45:35crazy algorithm where they know exactly
1:45:37what video you would like to watch next
1:45:39based on AI and all of your viewing
1:45:41behavior. And the algorithm says that
1:45:43this video is the perfect video for you.
1:45:46It's different for everybody looking
1:45:47right now. Check this video out, and I
1:45:49bet you you might love it.

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