E54: Spread trading big tech, capital allocation, Zillow's misfire, Progressives suffer losses

00:00:00.000 | My body is a wonderland.

00:00:02.560 | If that wonderland is white, soft and mushy.

00:00:06.080 | Sure.

00:00:06.640 | And hairy too.

00:00:09.340 | You know, the worst thing about skin on skin sleeping with the newborn is that,

00:00:14.620 | you know, sometimes she roots and she goes after the man, the male nip.

00:00:18.380 | I know.

00:00:18.860 | Problem is my nipples covered in hair.

00:00:20.560 | It's really awkward for everybody.

00:00:23.020 | She start gagging.

00:00:25.260 | I'll tell Tali that story when she's 18 or at her wedding.

00:00:28.120 | It'll be even better.

00:00:28.820 | All in.

00:00:29.720 | Let your winners ride.

00:00:31.960 | Rain man, David Sack.

00:00:34.840 | I'm doing all in.

00:00:37.700 | And it said.

00:00:38.460 | We open sourced it to the fans and they've just gone crazy with it.

00:00:41.600 | Love you guys.

00:00:42.220 | Queen of Kinwa.

00:00:43.920 | I'm doing all in.

00:00:45.720 | Hey everybody.

00:00:46.960 | Welcome to another episode of the all in podcast.

00:00:50.480 | I am wearing a blue shirt.

00:00:52.400 | I am a pasty white old Greek man who's balding and obnoxious.

00:00:58.400 | And, uh, with me today is, uh, no, no, no, no, no.

00:01:00.960 | You have to say, you have to say your pronoun, bro.

00:01:02.320 | Am I?

00:01:03.020 | Oh, and my pronouns are, uh, oh wait, hold on.

00:01:05.560 | My pronouns.

00:01:06.400 | My pronouns are beep beep.

00:01:08.180 | And most people just call me a jerk with me today.

00:01:11.560 | Of course is my Sri Lankan Oracle looking wearing a furry sweater.

00:01:17.220 | Hello everybody.

00:01:18.160 | My name is Chamath.

00:01:19.200 | I have a salt and pepper, black hair, brown eyes, uh, black hair, uh, black eyes.

00:01:25.260 | I'm wearing a black shirt.

00:01:26.300 | And I'm wearing a black shirt.

00:01:27.200 | Um, I'm wearing.

00:01:28.120 | Uh, I am tall, uh, six foot two.

00:01:31.040 | I go by the pronouns.

00:01:33.620 | We King and stud muffin.

00:01:36.360 | And, uh, uh, I'm here to talk to you about, uh, internet security protocols.

00:01:42.900 | Wah, wah, wah, wah.

00:01:43.900 | I look like article.

00:01:45.760 | I think people should just come up and say, well, I don't look like the closest.

00:01:49.440 | Like, I don't look like Urkel.

00:01:50.540 | I look like a Bollywood.

00:01:51.660 | When you put your glass, I'm like the Sri Lankan article to us.

00:01:56.520 | Welcome to the all in podcast.

00:01:57.840 | guess two out of the four of us are canceled next up for cancellation sax yes i'm coming to

00:02:04.160 | you here from the floor of the new york stock exchange which was once land that belonged to

00:02:09.120 | the mojico and the montauk the oneida the erie and the iroquois tribes oh we're all here since time

00:02:26.000 | didn't you went for it sax i love you i'm isn't it important that we at any moment

00:02:33.440 | that we're successful we have to flagellate ourselves and remind ourselves

00:02:38.160 | that at one time all this land was owned by somebody else we stole it also the greeks

00:02:45.600 | conquered the romans but you forgot to mention you're also wearing a brother shirt that is

00:02:54.160 | four sizes too large this is my slim fit so that slim fit oh no here we go again sax has been

00:03:01.520 | upgrading the wardrobe he's changing wait wait before freebird does the intro uh jay

00:03:05.520 | kyle you want to tell them why we're we're doing these intros like this yeah i gotta

00:03:09.120 | pause before our kids okay yesterday on the internet emerged a series of videos that were

00:03:15.440 | clipped of microsoft presenting their new suite of developer tools yada yada and corporate people

00:03:22.320 | and the internet was like oh my god this is crazy woke ism like what what is happening here this

00:03:26.720 | no i thought it was a skit i thought it was a saturday night and so right and so then as soon

00:03:31.280 | as they got called out by the entire internet they claimed that they were doing this for visually

00:03:34.800 | impaired people which kind of begs the question of why visually impaired people need to be able to

00:03:38.960 | do this and so they're doing this for visually impaired people and they're doing this for

00:03:42.720 | people who are visually impaired and they're doing this for people who are visually impaired

00:03:45.280 | and they're doing this for people who are visually impaired and they're doing this for people who are

00:03:48.480 | visually impaired and they're doing this for people who are visually impaired and they're doing this

00:03:50.480 | for people who are visually impaired and they're doing this for people who are visually impaired

00:03:51.600 | people need to know what race you are like it's still playing into this like crazy weight race

00:03:57.200 | consciousness but then on top of it it wasn't just that we we know it's not that because then they

00:04:02.400 | start doing this no no but hold on yeah also if you if you're blind and technically can't see

00:04:06.720 | you may not even know what blue means because you will have never seen the color blue or blonde

00:04:11.440 | okay right right but they were also identifying their races which kind of begs the question of

00:04:16.080 | why that's important but if you were born blind you would not know what that means either you're

00:04:20.400 | literally colorblind people have explained to people putting you on the same footing as people

00:04:24.960 | who are not visually impaired i'm saying i'm saying if you're visually impaired you're using

00:04:28.480 | the wrong language that language is for the sighted people okay but i i'm just calling

00:04:34.400 | on their stated explanation that it has anything to do with visually impaired because

00:04:38.480 | then they went on to basically recite the names of 10 tribes native american tribes that no one's

00:04:44.240 | ever heard of on on which the microsoft campus used to belong to so which is why i was kind

00:04:50.320 | of making fun of that in my initial statement but so look this is just woke capitalism this is

00:04:55.440 | wokeism out of control obviously they didn't see the election results

00:04:59.680 | earlier in the week it's clearly there was some level of virtue signaling i think in their defense

00:05:04.480 | they were trying to do it i think for the visually impaired the problem was they didn't explain the

00:05:09.520 | context and they didn't give instructions to the people on what to do so the people came out but

00:05:15.280 | jay cal that video that was a clip pulled out of a broader context here right so like apparently

00:05:20.240 | this is common on campus or common there that this is happening all over so we just know it

00:05:24.640 | isn't common because i asked people online well it was optional it was optional it's optional

00:05:29.120 | apparently to the common point i think the reason the internet reacted the way it was was i asked

00:05:32.960 | every single person who came at me because the woke left came at me i just said can you show me

00:05:37.920 | another clip of this on youtube of any event where this occurred and nobody could so i think this was

00:05:42.960 | kind of a first when did you stop being a member of that woke left jcal i've never liked the

00:05:48.960 | historical side i've never liked the historical side i've never liked the historical side i've never

00:05:50.160 | been for bernie i've never been for elizabeth ward i've always been moderate always wait can

00:05:54.000 | i hear freberg's intro yeah freberg can we hear yours my identity is an illusion it's an illusion

00:06:01.360 | created by the viewer and you can call me whatever you want i sit on the ground where during the

00:06:07.920 | haitian period there was lava and magma and nothing but co2 and methane and i represent those gases

00:06:14.720 | that are now lost to the oxygenation and the cyanobacteria that swarmed over this earth and

00:06:20.080 | took everything over and led to the formation of eukaryotic life and here we all sit today in our

00:06:25.200 | privileged existence thank you are you saying that you want to freberg is just electrons hitting

00:06:30.880 | neurons in interesting ways yeah i know he's like exactly he's like it is his pronouncer his

00:06:35.760 | pronouns are proton and dark matter biochemical quantum bath quantum foam is my pronoun so would

00:06:44.480 | you like to formally apologize for colonizing the dark matter during the big bang now

00:06:50.000 | or would you like to i feel it was inappropriate it wasn't fair when the cyanobacteria took over the

00:06:57.360 | the face of the earth and sucked up all the co2 and created all the oxygen and and for that we all

00:07:01.760 | apologize for the genocide of the for the genocide of of co2 and methane i mean those molecules were

00:07:10.560 | really happy and they had a you know they had a very kind of like peaceful existence on this earth

00:07:15.920 | and you know cyanobacteria just came in and ripped it away

00:07:19.920 | just took it all away from there and you know and then the offspring ended up being us and here we

00:07:25.200 | are so apologies all right all right welcome to episode 54. everybody's canceled the final episode

00:07:34.480 | everybody's horrible i don't think that the microsoft thing was bad when you hear the

00:07:41.120 | broader context it was like you know that's just you know i think it's a reasonable thing that

00:07:44.880 | visually impaired people i'm still absurd i'm still long microsoft and google and short the rest of

00:07:49.840 | big tech so i'm fine with it there you go back to the stock price i actually i i do you think that

00:07:54.560 | the google long netflix short play is the right play i think the best i think the best trade on

00:07:59.600 | the best trade on the internet the most obvious simple money making trade is long microsoft google

00:08:03.760 | short big tech the rest of the big tech short ibm short netflix no no no no no no no no meaning

00:08:09.600 | you can you can very comfortably short apple facebook amazon netflix and be long microsoft

00:08:14.720 | google so as a spread trade right right it's the most it's the best risk parity trade on the

00:08:19.760 | internet right now i mean period in the markets can you explain explain the spreadsheet so look

00:08:23.920 | look i i tweeted this a while ago but it's like and and again the i i think like

00:08:29.120 | well let me be constructive and say the people on twitter that respond to these

00:08:34.240 | threads are not totally stupid although i think they're kind of idiotic um i said you know here's

00:08:39.280 | how you can effectively you know i said something about you know big tech and i said oh i can

00:08:43.760 | comfortably put my short on and i'm kind of trolling people when i do that because i'm not

00:08:49.680 | full trade and the real trade whenever you put anything on, in my opinion, is all about

00:08:54.320 | managing risk and the best thing about the internet and the stock market is that when

00:08:59.800 | you're betting on internet stocks, you don't necessarily have to be naked long or naked

00:09:03.860 | short which comes with a lot more risk than if you were long one security and short another

00:09:10.620 | against it.

00:09:11.620 | For example, over the last ten years, you would have made a lot of money by being long

00:09:15.960 | Amazon and short a basket of traditional commerce companies, offline commerce.

00:09:22.040 | I'm going to make up a basket but Macy's, JCPenney, Kmart, Sears, right?

00:09:27.460 | If you were short those and long Amazon, that's what's called a spread trade.

00:09:31.920 | You're basically playing the gap between your longs and your shorts.

00:09:36.660 | It's independent of where the market generally trades is one of the key points.

00:09:40.020 | Irrelevant of the market.

00:09:41.020 | You're basically saying-

00:09:42.020 | Because those stocks could go up but just not anywhere near Amazon.

00:09:45.200 | Everything could go up, right.

00:09:45.940 | Right.

00:09:47.280 | When you put that trade on, for example, I'm going to bet that if everything goes up, Amazon

00:09:52.460 | will go up more than Kmart, Walmart, Sears.

00:09:56.920 | If the stock market goes down, Amazon won't go down that much but these ones will go down

00:10:01.660 | a lot.

00:10:02.660 | You're playing the spread.

00:10:04.760 | Just to be very explicit, there was a very, and I talked about this last week, but this

00:10:10.400 | idea wasn't mine.

00:10:11.440 | It's a borrowed trade from somebody who's a very well-known hedge fund manager who put

00:10:15.540 | it on.

00:10:15.920 | It's a massive size.

00:10:17.940 | To be honest, not knowing much of anything, I just copied it.

00:10:21.160 | His initial trade was long Google, short Facebook.

00:10:26.200 | That trade basically was at parity which meant that the long and the short canceled each

00:10:30.540 | other out for about the last four years.

00:10:34.100 | Until the last year, it completely blew out and it returned about 80%, 85%.

00:10:39.500 | If you had put $100 in, you would have made about 85 bucks on this trade by being long

00:10:44.600 | Google, short Facebook.

00:10:45.800 | The bigger trade at scale is actually long Google and Microsoft and short the rest of

00:10:52.520 | big tech.

00:10:53.740 | There's a lot of vagaries why that this idea makes a lot of sense.

00:10:57.340 | What you're saying is they'll outperform the other basket of tech.

00:11:00.160 | On a relative basis.

00:11:01.240 | On a relative basis.

00:11:02.240 | It's not like you're saying Airbnb can't go up or Facebook can't go up.

00:11:06.920 | It could.

00:11:07.920 | It's not going to go up as much as those other two.

00:11:10.280 | He's saying the trillion dollar market cap companies, not the Airbnb's.

00:11:14.820 | Oh, okay.

00:11:15.780 | The reason why focusing there makes sense is they're hyper liquid markets.

00:11:21.160 | They have tremendous ways in which you can have massive size on.

00:11:25.700 | You could put a trade of 10 billion long versus 10 billion short.

00:11:29.920 | You can put mega size on these things if you have real conviction.

00:11:35.400 | The third thing is when the banks look at that kind of position, they actually, from

00:11:40.160 | a risk management perspective, treat it differently than if you were just naked long any one of

00:11:44.980 | these things.

00:11:45.760 | Naked long would be just making one bet.

00:11:47.540 | Yeah.

00:11:48.540 | Or naked short, which is even more dangerous.

00:11:50.760 | Because if the market collapses by 30%, both stocks might go down 30 roughly, but one will

00:11:57.640 | go down 32 and the other one will go down 28.

00:12:00.000 | And so you're really only exposed-

00:12:01.000 | You're down 2%.

00:12:02.000 | 2% as opposed to the 30%.

00:12:04.060 | So all the market risk is taken out when you make trades like that.

00:12:07.200 | Yeah.

00:12:08.200 | The reason it's possible also today to do so at such a scale, right Chamath, is interest

00:12:12.180 | rates are so low.

00:12:13.880 | So when you borrow on margin to go long.

00:12:15.640 | Yeah.

00:12:15.740 | So if you're long, the rate is very low.

00:12:17.320 | And when you short the stock, if it's a highly liquid stock, it doesn't cost a lot to borrow

00:12:20.880 | to short.

00:12:21.880 | That's right.

00:12:22.880 | So your actual carrying cost on that trade ends up being pretty low relative to the upside

00:12:28.740 | you expect.

00:12:29.740 | So just to give you a sense of it, when I tweeted that tweet out, to complete the picture,

00:12:34.580 | I was actually long something against my proposed short.

00:12:38.940 | And I put it on in pretty meaningful leverage.

00:12:41.460 | And it's worked out really well because I was playing the spread.

00:12:45.620 | And I was like, "Oh, I'm going to do this."

00:12:47.620 | And I was like, "I'm going to do this."

00:12:48.620 | And I was like, "I'm going to do this."

00:12:49.620 | And I was like, "I'm going to do this."

00:12:50.620 | And I was like, "I'm going to do this."

00:12:51.620 | And I was like, "I'm going to do this."

00:12:52.620 | And I was like, "I'm going to do this."

00:12:53.620 | And I was like, "I'm going to do this."

00:12:54.620 | And I was like, "I'm going to do this."

00:12:55.620 | And I was like, "I'm going to do this."

00:12:56.620 | And I was like, "I'm going to do this."

00:12:57.620 | And I was like, "I'm going to do this."

00:12:58.620 | And I was like, "I'm going to do this."

00:12:59.620 | And I was like, "I'm going to do this."

00:13:00.620 | search, they're inoculated. And so in many ways, Google is the

00:13:04.320 | safest. And it's also, as we've said before, the purest

00:13:07.340 | moneymaking machine on the internet,

00:13:08.700 | you're referring, of course, to Google paying Apple $10 billion

00:13:13.240 | to be correct, search in their own Android. So one platform and

00:13:16.740 | on the other platform, they they pay them so much that they're

00:13:19.340 | going to be always protected. And the second best company is

00:13:22.940 | Microsoft. And you we even saw it, by the way, this past week.

00:13:25.700 | I don't know if you guys saw that, but Microsoft decided to

00:13:28.040 | broadside attack against notion. Yeah, that was a productivity

00:13:31.940 | app that's been growing very well. I felt this when I was on

00:13:35.280 | the board of slack, when Microsoft put its gun sights on

00:13:38.180 | us, we always thought that they could not out compete with us.

00:13:41.320 | And what it turns out is, when you have a massive distribution

00:13:45.420 | advantage, feature parity is enough. And you can actually be

00:13:49.160 | slightly less than good enough on the features. Because

00:13:52.260 | distribution and bundling and packaging overpower a customer's

00:13:55.820 | desire to adopt a product. So in the case of slack,

00:13:58.020 | it was very difficult, I think, for us to compete against

00:14:01.420 | Microsoft's bundling of teams, with all this other software

00:14:06.060 | that they were selling, and all the discounting that they could

00:14:08.220 | do made it very difficult for us to compete because we had a

00:14:10.620 | single product. And lo and behold, 18 months later, the

00:14:14.100 | only real long term protective solution for slack shareholders

00:14:17.160 | was to basically get bought by Salesforce so that you could be

00:14:20.140 | part of a bigger whole. This past week, Microsoft decided to

00:14:23.520 | go after notion. And it's going to be I think, a very similar

00:14:26.640 | story where

00:14:27.540 | you know, once they decide to sort of go after this product

00:14:31.300 | experience, they only need to be 80% is good. And then the

00:14:35.100 | distribution and bundling and packaging will take care of the

00:14:37.440 | other 20%.

00:14:38.200 | It doesn't kill the other company, but it creates headwinds

00:14:40.800 | that massive headwinds because because a company like notion

00:14:43.500 | cannot be fully valued over long periods of time simply being an

00:14:47.020 | SMB company, you at a minimum, you'll have to move into the mid

00:14:49.620 | market, you may necessarily never have to go to the

00:14:52.380 | enterprise. But you probably have to go to the mid market.

00:14:55.140 | And in that is a very troublesome path.

00:14:56.940 | Because Microsoft has so much, you know, 10x so many tentacles

00:15:01.380 | inside of those businesses. So anyways, basically the long

00:15:03.780 | Microsoft long Google is a pretty obvious kind of like

00:15:07.320 | monopolistic, you know, pair trade, the question is, what do

00:15:11.040 | you short against it, so that you can take up the market

00:15:14.040 | volatility and you can play spread. Again, Apple has severe,

00:15:18.360 | you know, headwinds with respect to inflation pressures, and

00:15:22.320 | margins and supply chain issues. Amazon has pretty meaningful

00:15:26.280 | headwinds.

00:15:26.780 | Now, relative to pricing power and competition. Facebook has

00:15:30.320 | pressure with respect to regulatory oversight.

00:15:32.420 | I just came up with one. What about Airbnb versus the

00:15:35.120 | airline? You're talking about trade, you're talking about

00:15:37.940 | smaller rinky dink ideas.

00:15:39.860 | I listen, I'm not playing the same chip stack issue. I wasn't

00:15:42.560 | there on Tuesday night. I'm on a Thursday night. So no, no, no,

00:15:45.140 | be a good spread for me.

00:15:46.220 | No, that's a stupid idea. And I'll tell you what, okay, if

00:15:48.980 | you're going to put these things on go to where the deepest

00:15:51.540 | liquid markets are, because those are the same things that

00:15:53.720 | are going to be in the market. And that's why I'm saying that

00:15:56.120 | those are the safest. Okay. Right? Like, like, don't try to

00:16:00.380 | be different. Being the same here.

00:16:02.900 | Tell me why Airbnb, which is an incredible margin business

00:16:06.200 | that's incredibly well run and growing versus airlines, which

00:16:09.320 | are horribly run and low margin. Why wouldn't that be a good

00:16:13.180 | spread trade? I'm just thinking.

00:16:14.180 | I think it's a very, very two, you're picking two random

00:16:17.820 | companies out of a hat.

00:16:19.580 | Well, they're both in transportation and vacation and

00:16:23.460 | travel completely different businesses with completely

00:16:25.560 | different

00:16:25.840 | motivations with different capital pools with different

00:16:28.180 | people that own the stock. There's no point trying to get

00:16:30.960 | cute on these things. My point is, if you really want to be

00:16:33.760 | hedged against market risk, got it. Code of where it's safest.

00:16:39.080 | Find the simplest, most obvious thing. Don't overthink it or

00:16:43.180 | don't put it on. So another obvious one, here's it. Here's

00:16:47.240 | it. So obvious is within big tech, figure out which ones you

00:16:51.040 | want to be long, which ones you want to be short. That's a

00:16:52.960 | spread trade that over the next four or five years where if you

00:16:55.720 | expect a lot of market volatility, it makes sense to

00:16:58.820 | maybe put some of this kind of stuff on right. A different

00:17:02.040 | version of this idea, which makes sense is in autos. Again,

00:17:05.760 | trillions of dollars of market cap. And you can make a

00:17:08.920 | decision. Do I want to be long, Tesla lucid and Rivian and short

00:17:14.980 | the traditional autos that could be a trade. You know, but trying

00:17:19.660 | to change like trying to go after like, let me pick Airbnb

00:17:22.180 | versus United Airlines is too random for me. And I don't think

00:17:25.060 | they're correlated.

00:17:25.700 | enough for it to make any sense.

00:17:28.040 | All right, speaking of the stock market, sacks, you've got the

00:17:31.440 | background of the New York Stock Exchange as your zoom background

00:17:34.040 | today. What's that about?

00:17:35.420 | Yeah, so bird listed on the New York Stock Exchange today. This

00:17:40.580 | is a company that I've been involved in pretty much since the

00:17:43.040 | beginning, we led the Series A round back in 2017. It was

00:17:46.480 | actually the first check I wrote as a VC to lead around at craft

00:17:51.320 | and four years later public company on the New York Stock

00:17:53.960 | Exchange. Pretty amazing.

00:17:55.040 | And so you're literally at the New York Stock Exchange as we

00:17:59.240 | see the first remote bestie.

00:18:01.400 | Yes. And you can see behind me. That is the floor of the New York

00:18:06.680 | Stock Exchange. It's not like, you know, if you've seen the

00:18:09.020 | movie trading places, it's not like that anymore. There are no

00:18:11.540 | stockbrokers. There's no like paper flying around. Got it. I'm

00:18:15.240 | not really sure what the purpose of all those monitors are down

00:18:17.900 | there. I feels to me a little bit like a movie set.

00:18:20.160 | It's like a movie set. Yeah. And so people come here to record

00:18:25.020 | things. But as we all know, the all the trades are really

00:18:28.920 | happening inside giant machines.

00:18:30.520 | Can you turn around and just start yelling Booyah Booyah

00:18:35.220 | security comes in?

00:18:37.320 | No, I'm in I'm elevated above the floor. No one can really

00:18:42.260 | hear me. I'm in like this sort of broadcast booth.

00:18:45.140 | So take us behind the decision to go public as a four year old

00:18:49.200 | company. We were expecting, you know, Airbnb, Ubers and Lyfts,

00:18:54.900 | took over 10 years to go public. Now here we are sitting on a

00:18:57.460 | four year old public company. Is that a good thing? A bad thing?

00:19:01.220 | Something in between? And how does the board and the management

00:19:04.080 | team make that decision to go public?

00:19:05.460 | I think it's a good thing. Because the company Well, the

00:19:08.900 | company wanted to I think it had the opportunity to it. It grew

00:19:12.640 | very, very quickly before COVID. Then you had COVID was like sort

00:19:16.680 | of a huge setback. They I mean, basically, the scooter industry

00:19:19.400 | to stop for at least six months because of lockdowns. But then

00:19:23.420 | coming out of COVID, they bounced back

00:19:24.780 | really strongly, they kind of pivoted their model to what's

00:19:28.620 | called a fleet manager model where basically they're putting

00:19:31.040 | a business in a box for a local operator or local entrepreneur

00:19:35.520 | to buy the scooters with financing and manage the fleet

00:19:38.740 | themselves. So it's a much more highly virtualized model. And so

00:19:43.560 | as a result of that in q2, they just did 60 million in revenue

00:19:47.140 | in the last quarter. And I think it was gross profit of something

00:19:53.520 | like 27%.

00:19:54.660 | And it was had a loss of like 12 million. So they're very, very

00:19:59.940 | close to getting to profitability. And, you know,

00:20:04.500 | companies only four years old, you know, it took Uber 12 years

00:20:07.460 | or whatever to get to be public. So it's been pretty, it's been a

00:20:10.420 | pretty amazing ride. There's been a lot of big ups and downs.

00:20:13.280 | But so it's kind of a pretty sweet event.

00:20:16.160 | Is it trading? I know it was switchback was like the SPAC

00:20:19.600 | name,

00:20:20.040 | right. So it's it today was the first day started trading under

00:20:22.600 | the ticker symbol BRDS.

00:20:24.540 | I guess all birds took bi RD. So we took BRDS. And, you know,

00:20:32.160 | there's a total number of shares outstanding of I want to say

00:20:35.580 | roughly 300 million. So it's about a $2.4 billion market cap,

00:20:41.280 | you know, as it stands right now, which you know, for a

00:20:44.340 | Series A investors pretty great.

00:20:45.700 | Really happy for you.

00:20:46.720 | Sex. Yeah. Yeah. Congratulations. It's great.

00:20:48.900 | Congrats, dude.

00:20:49.680 | We heard last week Sequoia is going to do the Sequoia fund

00:20:52.740 | this evergreen fund, keep owning

00:20:54.420 | shares now as a VC. Do you distribute after four years of

00:20:59.920 | this investment and you made multiple investments? Or do you

00:21:02.340 | make the decision? Hey, we think it's undervalued, we have, you

00:21:05.880 | know, conviction in the company, we were going to be in it for 10

00:21:08.380 | years, or do you just take the quick win and give everybody

00:21:10.540 | their shares?

00:21:11.040 | Well, I've I'm going to ever agree to be on the board for the

00:21:13.500 | next year. So you know, I'm planning to do that. And are we

00:21:18.680 | have a traditional six month lockup. And so at that point,

00:21:21.800 | we'd have to make a decision about when or how many shares

00:21:24.300 | we're going to distribute, how much to distribute the shares.

00:21:27.060 | And this is the first time we've been confronted with decision.

00:21:29.640 | I mean, Kraft Ventures is only a four year old firm. And like I

00:21:32.580 | said, this is actually the first round that I led as a VC. So

00:21:36.420 | it's the first time we've been confronted with a distribution

00:21:38.940 | of this magnitude, we've had some smaller distributions. So

00:21:42.660 | yeah, we still have to make those decisions. We haven't

00:21:44.220 | decided yet what we're going to do.

00:21:45.300 | If you if the stock is up, let's say, meaningfully in the next

00:21:49.020 | six months, and you get to that, you know, six months and a day

00:21:51.780 | and you have the ability to distribute,

00:21:54.180 | you know, a hundred percent, and you're looking at it, business

00:21:58.020 | is thriving, you're on the board, do you consider holding

00:22:01.260 | for a year or two so that you can distribute at $16 $25 or

00:22:06.060 | whatever your price target is?

00:22:07.320 | Maybe we haven't got we haven't gotten to that point yet. So

00:22:10.620 | yeah, I mean, I guess what I would say is that our bias would

00:22:14.760 | be to distribute shares to our LPS, so that they can make their

00:22:20.280 | own decisions about whether they're told or not. As long as

00:22:24.060 | the stock is, you know, priced fairly, if for some reason, we

00:22:26.820 | thought it wasn't, then there'd be an additional reason to hold

00:22:30.300 | on to it and make the distribution later.

00:22:31.800 | Jamal, what are your thoughts on this given it's come up before?

00:22:35.280 | And a number of us are going to be faced with this decision. And

00:22:38.460 | then we see Sequoia has got LP buy in for an evergreen fund.

00:22:42.060 | Well, I think an evergreen fund is different from having to

00:22:44.940 | figure out how to do distributions. So they're

00:22:48.600 | solving for two different ideas. The evergreen fund is really good

00:22:52.980 | because

00:22:53.940 | you don't have to do this continual fundraising process.

00:22:57.120 | And you can basically roll gains back into the next tranche of

00:23:01.320 | invested companies in an easier way. I like that idea. It was

00:23:04.820 | pretty rare at the time, I remember when I was starting

00:23:07.620 | social capital, the only fund that did it really well was

00:23:10.540 | Sutter Hill. And for a whole host of reasons, I decided to not do

00:23:14.780 | an evergreen fund. In hindsight, I think for me, that turned out

00:23:18.820 | to be better, because then it was easier for me to wind down

00:23:21.540 | and have a clear demarcation of

00:23:23.820 | when it was just myself and other LPS versus when it was just

00:23:29.520 | my capital. But there were some really good reasons to do it.

00:23:33.580 | The hardest thing I think that Sequoia is going to find in this

00:23:37.920 | new iteration is at some point, somebody's reputation will be on

00:23:43.200 | the line for judging public equities. And it's still not

00:23:48.660 | clear to me that people who live in breathe venture can context

00:23:52.740 | switch well enough to

00:23:53.700 | then live and breathe public equity. So just the best example

00:23:57.240 | I would say is like Tiger Global, when you look inside

00:23:59.340 | that organization, which is incredibly well run, there are

00:24:02.880 | two superb investors that carve the universe up, right? You have

00:24:07.300 | Chase Coleman that runs a public book, and you have Scott

00:24:09.240 | Schleifer that runs a private book. What does it prove? To me,

00:24:12.740 | it proves that it's just very hard to find a person that can

00:24:15.200 | do both. And the context switching is very complicated. So

00:24:18.600 | maybe Sequoia finds an incredible public market strategist that

00:24:22.540 | can then manage these positions.

00:24:23.580 | Otherwise, but they've done this for a few years, right?

00:24:27.480 | They've Sequoia, I don't know, people realize this, they set up

00:24:30.840 | an interest on the heritage fund, and they set it up with

00:24:33.120 | only GPS money, it's got billions under management, and

00:24:36.600 | it's been making late stage private but mostly public equity

00:24:39.720 | investing.

00:24:40.380 | I know, but that's a fund of funds. What I'm saying is, I'll

00:24:45.080 | be very honest with you, if I was an LP of Sequoia, I would

00:24:48.960 | want the money back. And the reason is, I'm not sure that

00:24:52.420 | Sequoia can compound

00:24:53.460 | money in the public markets anywhere near what I could. So

00:24:56.880 | do you buy the point that they make that like, exiting some of

00:25:00.080 | these left most of the, you know, kind of value creation on

00:25:03.340 | the table?

00:25:03.780 | No, I think what they're saying something much more subtle,

00:25:05.960 | which is they exited, and they have regrets for selling, you

00:25:09.600 | have to remember, when Sequoia distributed Google, every single

00:25:14.240 | partner got Google shares. Now, had they held those shares, they

00:25:19.200 | wouldn't be saying any of this. And famously, I'll tell you when

00:25:21.300 | I should they held their shares.

00:25:23.340 | I actually do.

00:25:25.020 | Fair enough. But maybe they did. Maybe they didn't. But let's

00:25:28.160 | just let's just put it out there that, for example, I know

00:25:30.360 | explicitly, when I almost merged social capital with Kleiner

00:25:33.060 | Perkins, like six years ago, I spent so much time with John

00:25:37.020 | door, the most incredible thing that I was so impressed with

00:25:39.480 | door was he was he told me, he had never sold a single share of

00:25:43.980 | Amazon that was distributed to him. And he had only sold a

00:25:47.400 | handful of shares of Google, only to fund future capital

00:25:50.840 | requirements of Kleiner at the time.

00:25:52.840 | So I just think that ultimately, I think probably what

00:25:56.560 | Sequoia was saying is, man, I wish I had not sold my Google

00:25:59.560 | shares when they were distributed to me. Because

00:26:01.600 | otherwise, they wouldn't make that claim.

00:26:03.100 | No, I think what they're saying is more subtle. I think they're

00:26:05.140 | saying usr LPS should have held them. We are on the board of

00:26:09.040 | these companies from day one, we have better insights in the

00:26:12.100 | second decade than in the first production board founder David

00:26:15.820 | Friedberg, how do you think about early exits, distributing

00:26:19.360 | capital, because you do have also with a startup stock, you're

00:26:22.720 | going to have a startup studio structure, which you should

00:26:25.000 | explain to the audience how a startup studio works, because you

00:26:27.700 | create companies, which is, you know, was a terrible place to be

00:26:31.120 | maybe five or 10 years ago, but it turns out you're in the best

00:26:33.400 | place because zero to one is where all the values created

00:26:35.740 | explain the two things, what a startup studio is for people who

00:26:39.640 | don't know. And then what's your view of selling early? If a

00:26:43.540 | company of yours goes public,

00:26:46.120 | I think there's a big, there's a bigger kind of framing here,

00:26:49.840 | which is a lot of

00:26:52.600 | There's, you know, professional money managers have tried to find

00:26:56.020 | ways to create what is called permanent capital, which is a

00:26:59.360 | vehicle whereby they can continuously make investments

00:27:02.740 | decide when to sell those investments and recycle the

00:27:05.120 | capital into new investments. With the idea being that over

00:27:08.240 | time, they're not at risk of capital outflows, meaning

00:27:11.300 | investors pull their money out, and they're not at risk of, you

00:27:16.180 | know, needing to kind of go out and raise more money and they

00:27:18.400 | can, they can share in the value creation as they grow their book

00:27:20.980 | value over time.

00:27:22.480 | Years ago, a bunch of hedge funds set up public reinsurance

00:27:26.440 | companies. Dan Loeb did this. What's his name? I know, did

00:27:31.360 | this lackman did it and basically, Bill Ackman did it,

00:27:33.820 | what they did is they set up a public company and you public

00:27:36.680 | company, a reinsurer. And then they use that that reinsure to

00:27:40.740 | underwrite reinsurance. And when you underwrite reinsurance, you

00:27:43.060 | get all this capital that you can then go invest, and then the

00:27:45.580 | hedge fund manage that investment. And because it's

00:27:47.880 | actually a public company, it's a got a balance sheet, the

00:27:52.360 | shareholders can't pull their money out, right, it's just got

00:27:54.640 | a balance sheet. And the hedge fund was managing that balance

00:27:57.460 | sheet. And you know, generating good returns. And this is

00:28:00.160 | effectively what Warren Buffett does. And everyone looks to

00:28:02.320 | Berkshire Hathaway and Warren Buffett, it's kind of the, you

00:28:05.120 | know, the key kind of long term here, which is, hey, look, if

00:28:10.100 | you can keep investing and keep compounding value, this thing

00:28:13.000 | can grow, you know, exponentially over time. So you

00:28:17.380 | know, the way we set up the production board, I had the

00:28:19.660 | option of raising a fund and being a fund manager, I chose

00:28:22.240 | to set up the production board, because I was much more

00:28:24.160 | interested in I think, the similar sort of vein of what

00:28:26.500 | Sequoia is saying, which is like, how do you become a longer

00:28:28.360 | term, builder and a longer term holder, and where you don't have

00:28:32.020 | these incentives to return capital, because you only get

00:28:35.020 | paid if and when you return capital. And, you know, and then

00:28:39.520 | you're kind of making these decisions to, you know, because

00:28:41.560 | your shareholders are saying, well, you had a good return

00:28:43.480 | quickly, give me the shares back and let me and mark your profit

00:28:46.180 | and take your share. And I was also more interested in look,

00:28:49.360 | the fact is, over time, there's always going to be opportunities

00:28:52.120 | to chase with the capital. So if we have a great gain, if

00:28:55.060 | something works out really well, we can take the gain, and we can

00:28:58.900 | reinvest that capital and building new things, there's no

00:29:01.180 | shortage of opportunities to pursue for the rest of my life.

00:29:03.700 | So that's why I set up the production board initially in

00:29:06.760 | partnership with alphabet. And then later on, we brought in,

00:29:08.980 | you know, Bill Gates and other Allen and co and other kind of

00:29:12.400 | investors that have a similar sort of mindset, which is like,

00:29:15.100 | let's just, if we haven't an exit, recycle that capital and

00:29:18.520 | continuously, they're not looking for a quick win, they

00:29:21.220 | don't have

00:29:21.520 | pension payments

00:29:22.000 | to make, right, they don't have a reason to distribute cash. And

00:29:25.720 | so same with me, like, I don't have a reason to take cash out.

00:29:28.120 | So the objective was just build this thing over time and grow

00:29:31.060 | value over time. And that's why I set it up the way I did. And I

00:29:34.420 | think it allows us to make, you know, really long term bets that

00:29:37.300 | are super risky. Most of what we're doing is super technical

00:29:41.020 | and difficult and maybe very hard to pull off, many of which

00:29:44.860 | are still after many years in a very early

00:29:46.780 | very patient capital, patient capital, and also the you know,

00:29:50.560 | the preference for

00:29:51.880 | not trying to find exits. But I have found this, I'll tell you

00:29:55.060 | one thing, I've been through a number of circumstances where I

00:29:58.180 | have seen businesses I've been an investor in or involved in,

00:30:00.520 | that have traded long term value for short term opportunity,

00:30:04.660 | meaning there's an opportunity to make a business that you can

00:30:07.780 | then go raise capital against, you change your strategy to do

00:30:10.780 | that, then you go raise VC funding. And now the business

00:30:13.420 | looks like it's working. But the 10x or 100x opportunity was

00:30:17.320 | taken off the table, because you ended up going down this

00:30:19.840 | different path, that was a sure thing.

00:30:21.760 | And then you went down this other path, that was more likely

00:30:23.980 | to work, that created value in the short term that allowed you

00:30:26.860 | to mark up your investment or raise capital against that. But

00:30:29.320 | you gave up the big long term thing. And I think that's

00:30:31.180 | something I've been trying to avoid with the structure. And it

00:30:33.940 | certainly makes sense with some of these other folks and what

00:30:36.040 | they're trying to do.

00:30:36.820 | So what we're getting at here, Sachs is decision making by

00:30:40.900 | capital allocators, and on behalf of their LPS, or letting

00:30:45.400 | the LPS make those decisions. Inevitably, the crypto world

00:30:48.640 | says, Well, why aren't you just doing this in a DAO?

00:30:51.040 | And, you know, having some decentralized authority, make the

00:30:55.660 | decisions. I had Vinnie Ling, I've had a conversation with our

00:30:59.560 | friend Vinnie Lingham, after the Solana stuff and multi coin

00:31:03.560 | capital. And we were talking about DAOs for early stage

00:31:07.040 | investing or syndicates and just brainstorming, hey, is there a

00:31:10.180 | way to do this? And the problem I came to every time was, should

00:31:14.740 | a bunch of folks be making decisions who are not meeting

00:31:18.200 | with the companies or meeting with 2000 companies a year,

00:31:20.920 | what are your thoughts on a DAO? Representing sort of what we

00:31:27.040 | collectively do, but we all do it, obviously, in different

00:31:29.680 | flavors?

00:31:30.340 | Does this actually exist? Yeah.

00:31:32.680 | Well, there have been DAOs that have existed to vote on buying

00:31:36.520 | NFTs. So yes, for collectibles.

00:31:38.920 | I mean, I kind of feel like I'll let you know when it actually

00:31:41.120 | gets here.

00:31:41.680 | So open minded to it, but who knows?

00:31:44.200 | Yeah, but I mean, we talked about these things as if they

00:31:46.240 | already are here, and they're not quite here. I mean,

00:31:48.480 | technically, I know they exist, but people haven't really

00:31:50.800 | figured out how to use them to, you know, to be a fund manager,

00:31:56.040 | for example,

00:31:57.040 | I think David's right. I think the look, I there, there are

00:32:00.580 | these three immutable features of web 3.0, that we're going to

00:32:05.100 | have to figure out over the next few years. So the obvious ones

00:32:08.580 | are decentralization, right? That makes sense. The second

00:32:11.980 | obvious one phase, the level of composability, which means that

00:32:15.300 | your plug and play with everything. But the third one is

00:32:18.880 | this idea of democratization.

00:32:20.680 | And governance, right? And that's where DAOs come in. And

00:32:23.320 | David's right, we don't really know what the boundaries of that

00:32:26.860 | feature is. I think it exists in some small level scale. But we

00:32:33.800 | need to have many iterations of companies get built to figure out

00:32:38.800 | what it'll mean. So I don't know, I'm taking a pretty

00:32:41.800 | traditional approach, Jason, which is that, you know, it's

00:32:44.860 | kind of like a crawl, walk, run strategy. Right now, I'm in the

00:32:47.380 | crawling phase. And I'm kind of saying, how did, how did the

00:32:50.560 | web 1.0 and web 2.0 develop, and I'm trying just copying it. So

00:32:55.240 | you know, in web 1.0 and 2.0, you needed companies like Sun

00:32:59.740 | Microsystems, and Cisco, and, you know, all of the plumbers

00:33:03.460 | foundational stuff to build plumbing for the internet, to

00:33:07.300 | allow the thousand flowers to bloom at the application level.

00:33:10.120 | And, you know, we had a very good reference model, by the way,

00:33:13.840 | for web 1.0. For most people, if you want to look at it, it's

00:33:16.240 | called the OSI reference stack. And if you actually look at that

00:33:19.060 | OSI stack,

00:33:20.440 | you can translate that to all kinds of value creation over the

00:33:25.180 | first, you know, two arcs of the internet over 20 years, trillions

00:33:28.640 | of dollars was created by just following each of those

00:33:31.360 | substrates. And in those transitional layers was where

00:33:34.880 | these great, beautiful companies were built. And I think

00:33:37.880 | similarly, we're going to do that again, but we need a

00:33:39.760 | different stack to represent what Web3 is. So yeah, you know,

00:33:44.300 | this week, we did something which was pretty straightforward,

00:33:46.540 | which was this idea that if you're going to build all these

00:33:49.060 | apps, you're going to need a lot of data. And you're going to

00:33:50.320 | need a distributed compute infrastructure, which means

00:33:53.500 | you're going to need very simple building blocks like remote

00:33:55.960 | procedure calls RPC that exists in web 2.0. It's kind of a not

00:34:00.580 | something you don't really think about, but in Web three doesn't

00:34:03.120 | exist. And so it's all this AWS, you know, GCP, like

00:34:07.340 | infrastructure that has to get built. And that's what syndica

00:34:10.300 | does. And I think that's a really very interesting

00:34:14.420 | observation there, because everybody is trying to go to the

00:34:18.020 | application level and talk about the consumer experience.

00:34:20.200 | But before you even have the ability, you know, we're talking

00:34:24.700 | about cars before we've even made a transmission or, you

00:34:27.660 | know, that's exactly right. This is why crypto comes across as so

00:34:31.160 | delusional and strange. Sometimes they wrote 3000 ICO

00:34:33.820 | papers, none of them were about infrastructure, they're all

00:34:36.940 | about some sort of endgame.

00:34:38.660 | The thing is, it's a very delicate balancing act, right?

00:34:41.180 | You need a handful of companies that capture consumer

00:34:44.420 | imagination, right, that then incentivize all of the plumbing

00:34:47.580 | companies to come in and build underneath it, right? So it's a

00:34:50.080 | very, it's a very delicate balancing act, right? So you

00:34:52.700 | needed CompuServe in order to enable a bunch of companies,

00:34:56.020 | then you needed AOL in order to enable another set, then you

00:34:58.660 | needed Yahoo, then you needed Google. And in all of that, what

00:35:02.380 | happened was people were pulled through, right, you needed

00:35:05.560 | Amazon commerce to justify AWS. So we're in that world where

00:35:11.180 | it's going to be a little back and forth where the pendulum will

00:35:13.540 | swing back and forth between consumer experiences that capture

00:35:16.300 | imagination get to some level of scale, that then create incentive

00:35:19.960 | for the developer ecosystem and the technology infrastructure to

00:35:23.200 | catch up.

00:35:23.720 | Zillow, which we talked about previously, became an iBuyer.

00:35:27.940 | What's an iBuyer? That means you buy a bunch of single family

00:35:30.880 | homes in all likelihood, like Opendoor and Redfin have been

00:35:35.060 | doing, and then you hope to flip them, maybe improve them and

00:35:39.880 | maybe lower costs to the consumers by taking out real

00:35:43.360 | estate brokers. This has created a lot of bad feelings amongst

00:35:47.500 | real estate brokers, a TikTok video,

00:35:49.840 | and a bunch of other things. I've been on a lot of social media

00:35:54.120 | forums, and I've been on a lot of social media forums, and I've

00:35:56.620 | been on a lot of social media forums, and I've been on a lot of

00:35:58.420 | social media forums, and I've been on a lot of social media

00:35:59.680 | forums, and I've been on a lot of social media forums, and I've

00:36:01.720 | been on a lot of social media forums, and I've been on a lot of

00:36:02.840 | social media forums, and I've been on a lot of social media

00:36:03.940 | forums, and I've been on a lot of social media forums, and I've

00:36:04.680 | been on a lot of social media forums, and I've been on a lot of

00:36:05.220 | social media forums, and I've been on a lot of social media

00:36:05.600 | forums, and I've been on a lot of social media forums, and I've

00:36:06.400 | been on a lot of social media forums, and I've been on a lot of

00:36:06.860 | over the decades. According ahead of their earnings call

00:36:10.400 | this week, Bloomberg reported Zillow is trying to offload

00:36:12.960 | 7,000 7,000 homes for 2.8 billion. That's about a 400k

00:36:18.900 | average per home. And Zillow shares dropped 37% this week

00:36:23.300 | alone from 100 to 66, their market cap has dropped 9 billion

00:36:28.060 | throughout the week. And they're down 70% from a peak valuation

00:36:31.760 | of 48 billion just in February about six months ago. Zillow is

00:36:35.860 | going to reduce its workforce by 25% over the next few months.

00:36:39.020 | I'm assuming that's all those I buyers. Anecdotally, a lot of

00:36:42.980 | what I'm hearing is they bought homes indiscriminately. The

00:36:46.720 | anecdotal stories that are breaking on Twitter and other

00:36:49.040 | forums with real estate brokers are, they would look at a home,

00:36:52.180 | they didn't know that it had a noisy neighbor or it was near

00:36:55.620 | power lines or whatever the people who came in bought them

00:36:57.820 | indiscriminately, maybe too fast, whereas some other

00:37:00.740 | companies maybe Opendoor or Redfin were more considered I

00:37:03.620 | actually had Glenn from Redfin on the pod.

00:37:05.740 | And he said, he's a very hard not long ago. And he said, it's a

00:37:08.140 | very hard operational business, you have to be very careful on

00:37:10.780 | what you buy and your entry price that seems to have turned

00:37:13.480 | out to be true. What do you think, Friedberg,

00:37:15.460 | Rich Barton, who runs Zillow is considered a legend in Silicon

00:37:20.140 | Valley, you know, he has been involved in some of the most

00:37:25.000 | successful internet companies. And you know, when he stepped

00:37:29.020 | back in as the founder of Zillow, step back in to run the

00:37:31.600 | business a few years ago, it was viewed as kind of a second,

00:37:34.900 | you know, resurrection of this business, and he was going to

00:37:37.780 | take it into new areas. And then three and a half years ago, he

00:37:40.000 | announced the side buyer program, which everyone thought

00:37:41.960 | was such a, you know, incredibly strong move, and obviously

00:37:45.400 | chased Opendoor, which Chamath is involved in, and I'm sure

00:37:48.160 | we'll share more on. But it was such an obvious opportunity that

00:37:51.520 | if you could add liquidity to the real estate market, the

00:37:54.860 | residential real estate market, there's an incredible amount of

00:37:57.220 | value to be had. Now, the way that they wrote about it, when

00:38:01.000 | they talked about it initially, and then the way that they've

00:38:02.800 | kind of talked about in their earnings report this week was

00:38:04.840 | that they were trying to be a quote market maker in the

00:38:06.880 | business. And it turned out that what they were really doing was

00:38:10.600 | being more of a speculator, right, a market maker looks at

00:38:13.160 | bids and asks and the spread and then tries to create a gap in

00:38:16.260 | that spread and make and take some share of it. And by adding

00:38:20.900 | that liquidity, the idea is the spreads can narrow and they can

00:38:23.560 | make money. In this case, they were looking at the historical

00:38:27.820 | velocity of selling prices of homes, and using that as a way

00:38:32.680 | to kind of project what was going to happen, which is

00:38:34.820 | basically a market maker, which makes them much more of a

00:38:37.060 | speculator than a market maker. And they clearly got this wrong.

00:38:41.900 | And they're kind of quote unquote, models on, you know,

00:38:44.540 | where prices headed ended up getting them in trouble. There's

00:38:47.660 | also the inherent conflict where they are now competing in a way

00:38:50.900 | with the brokers that generate a lot of revenue for them and are a

00:38:53.360 | big part of their core business. And they were clearly, you know,

00:38:57.440 | cannibalizing their own business where the Zestimate and some of

00:39:00.020 | the other scoring that they provide as a data and analytics

00:39:02.360 | platform to both sides of the existing market,

00:39:04.580 | they're blown up because they're coming in and saying,

00:39:06.380 | we're going to put our, you know, our foot down and say, this

00:39:08.720 | is what the value is. And it inevitably kind of cannibalizes

00:39:12.080 | the core product that they provide to both sides of the

00:39:14.720 | market. So you know, one could argue this was flawed from the

00:39:17.660 | beginning, the execution clearly was way off. And it begs the

00:39:20.600 | question, you know, where was leadership and kind of tracking

00:39:23.840 | what was going on here as these guys were buying homes at market

00:39:26.840 | prices that are well above what they were actually selling for in

00:39:29.540 | the market, no one was actually doing on the ground work. They

00:39:32.120 | were all doing kind of speculative models and saying,

00:39:34.160 | this is what we think.

00:39:34.560 | Will happen. And then they woke up way too late and lost way too

00:39:39.660 | much money. I think they lost $300 million in the quarter. So,

00:39:42.880 | you know, really a lot of questions and a lot of

00:39:45.360 | challenges on this. I'm sure Chamath has a point of view on,

00:39:48.360 | you know, what makes Opendoor distinct from from Zillow. But

00:39:52.240 | there's a really important kind of, you know, underlying here,

00:39:55.500 | you know, the maturity of a Silicon Valley entrepreneur

00:40:00.280 | who's crushed it so many times, doesn't mean that they're

00:40:03.360 | perfect. And, you know,

00:40:04.400 | this is a big mess.

00:40:05.360 | You can go really too fast into a turn here. And clearly they

00:40:08.640 | flipped the car. Chamath, I don't know how comfortable you

00:40:11.480 | are talking about this.

00:40:12.380 | Very comfortable. Okay, well, then here we go. Number one, you

00:40:17.060 | know, I'm not on the board of Opendoor. Of Opendoor.

00:40:20.680 | Maybe tell us about your history with Opendoor Chamath would be

00:40:23.300 | super.

00:40:23.600 | Look, I look, I am one of the largest individual shareholders

00:40:27.160 | of that company, I think somewhere between three and 4%

00:40:29.480 | of the business I own. We, you know, I came to own those shares

00:40:33.980 | with a large shareholder. I'm not a shareholder. I'm not a

00:40:34.380 | large investment, as well as through the transaction, where we

00:40:39.700 | merged one of our SPACs into it and took it. Yes. Couple things

00:40:48.240 | to say. The first is about the CEO and founder of Opendoor.

00:40:51.780 | Eric Wu is special, special, special. So let me just leave it

00:40:57.900 | at that. On that topic. The second is, I think that Rich

00:41:02.580 | Barton is very special.

00:41:03.960 | I think that he's very, very important. I think that he's a

00:41:06.860 | very important person. And I think that he's a very important

00:41:08.880 | person. And I think that he's a very important person. And I'm

00:41:10.860 | very, very happy to be part of it. But it speaks to two big

00:41:13.920 | mistakes that Zillow made. The first is that catching a wave of

00:41:18.360 | disruption is very difficult when you have an old line

00:41:22.560 | business that is fundamentally competitive with the new line of

00:41:25.840 | business. And Zillow, as David said, had this thing called Zestimate,

00:41:30.180 | which is a very interesting thing. And it's a very interesting

00:41:33.180 | thing to think about. And it's a very interesting thing to think

00:41:36.120 | about. And it's a very interesting thing to think about.

00:41:38.160 | And it's a very interesting thing to think about. And it's a very

00:41:40.920 | interesting thing to think about. And it's a very interesting thing

00:41:43.440 | to think about. And it's a very interesting thing to think about.

00:41:45.600 | And it's a very interesting thing to think about. And it's a very

00:41:47.820 | interesting thing to think about. And it's a very interesting thing

00:41:49.260 | to think about. And it's a very interesting thing to think about.

00:41:50.220 | And it's a very interesting thing to think about. And it's a very

00:41:51.120 | interesting thing to think about. And it's a very interesting thing

00:41:51.900 | to think about. And it's a very interesting thing to think about.

00:41:52.320 | And it's a very interesting thing to think about. And it's a very

00:41:53.120 | click worthy, then if you go in there, and it shows some depressed value, you think the site

00:41:57.560 | sucks. That's the unfortunate psychological reaction. So I think whether we believe it or

00:42:02.960 | not, or whether Zillow knew it or not, is estimate over time, basically calcified this idea of price

00:42:10.020 | inflation. So the accuracy was never a goal. So then if you take that business, and then you try

00:42:15.920 | to orient it towards home buying, and you use probably zestimate or some version of it to

00:42:20.940 | underpin how you buy and take risk, it creates a lot of risk. And I think this is essentially what

00:42:25.640 | played out where they were over buying homes. And they didn't know how to price this stuff

00:42:29.440 | accurately. So you know, my partner Ravi tweeted this out, but you know, the open door margin on

00:42:35.960 | average is about 10%. The Zillow margin on average was 3%. So they had a much more razor thin margin

00:42:42.180 | of safety here, which again speaks to pricing. And then it speaks to this third thing, which is that

00:42:48.760 | if you start doing one thing and do it really well with software, the gains over years really

00:42:55.940 | compound. And so when somebody else shows up and tries to pivot their business to try to copy it,

00:43:01.260 | it's very, very difficult. The classic example is Google versus Yahoo, Yahoo had a beautiful

00:43:06.480 | directory driven business. But when Larry and Sergey really Larry invented PageRank,

00:43:11.860 | and then invented that first version of a Google search index. As we saw it play out over the next

00:43:17.500 | 10 or 15 years,

00:43:18.580 | it was impossible for Yahoo to really invest the technical law to the technical capital necessary

00:43:24.160 | to catch up with Google. And every day and every week and every year as free work talked about last

00:43:29.700 | week, those technical gains compound and compound and now Google is completely unassailable with

00:43:35.760 | respect to search. I suspect we will look back and the ability to accurately forecast price and

00:43:43.420 | volatility and the ability to sell these assets.

00:43:48.860 | at a defined margin of safety in a predictable way is something

00:43:53.220 | software can solve. And it seems that open door is the first

00:43:58.900 | doesn't necessarily mean it'll be the only one. But it has an

00:44:02.920 | enormous headstart now. And as long as they can keep iterating,

00:44:06.460 | those gains will compound. So that's what I think. I just

00:44:10.460 | think this is a wonderful business. run by an incredible

00:44:13.820 | CEO to wrap up this Zillow story sacks. Any thoughts on, you

00:44:19.100 | know, to my point here, you know, you're the rating agency,

00:44:22.060 | and you had this business and the business might be

00:44:25.040 | orthogonal to the existing money printing machine on a strategic

00:44:28.940 | basis. What do you think? Any lessons or mistakes here? In

00:44:32.900 | terms of when you handicap Zillow? Or do you want to just

00:44:35.480 | move on and talk about it?

00:44:36.320 | I mean, look, I'm a I was a C investor and open door because

00:44:39.680 | rabbi invite me to the seed round. So, you know, I'm a

00:44:43.260 | little biased.

00:44:43.880 | Here, but I think it's pretty obvious what happened. Zillow

00:44:46.940 | tried to copy them, the business is much more operationally

00:44:50.080 | complicated than they realized it's a low business, low margin

00:44:53.420 | business with the tuck, which requires a ton of capital. So if

00:44:57.240 | you're off a little bit, the losses can be huge. And Zillow

00:45:00.820 | couldn't figure it out. They underestimate the difficulty.

00:45:03.160 | That's what frequently happens when a big company tries to copy

00:45:06.140 | a smaller sort of upstart company. So I mean, that to me

00:45:09.420 | is what happened in a nutshell. Quite frankly, we're an hour

00:45:11.420 | into this pod, and we haven't discussed

00:45:13.260 | issues, any issue that I think is broadly relevant to most

00:45:16.200 | Americans. I think this is one of our worst episodes, we're

00:45:18.700 | going to bore everyone to tears. I frankly don't understand what

00:45:21.060 | the you're doing. I don't even know why we have a topic

00:45:22.800 | list. When you start pulling it out of your ass like DAOs. And I

00:45:26.140 | don't know what the else.

00:45:27.260 | All right. All right. Fine. We'll talk about politics.

00:45:29.460 | I thought the doubt question sucked. All right. I'm just

00:45:32.820 | giving you the opportunity.

00:45:34.200 | That we shouldn't even be talking about cut it out of the

00:45:38.260 | show. Cut it out.

00:45:39.320 | This whole episode should be cut.

00:45:40.320 | Jesus Christ.

00:45:42.700 | This is episodes you ever done.

00:45:44.380 | Yeah, I agree. I think we should cut all that.

00:45:46.180 | It's going great.

00:45:46.900 | Jason, I agree that that part where we cut it. That's all

00:45:51.620 | right, fine. You got some loser.

00:45:53.680 | I'm trying to give you guys the benefit of the doubt to just

00:45:56.740 | because it was like, no one cares. All right, fine. Calm

00:45:59.600 | down, everybody. You want to talk about politics? We talk

00:46:02.380 | about politics. Okay, Sax. Go ahead. Tell us about the

00:46:04.460 | election.

00:46:04.960 | Okay, I'll just rattle off some of the key results here from

00:46:07.720 | blue states. We have a woke lash going on all across the

00:46:11.100 | country.

00:46:12.140 | The important thing in Virginia, a state that Biden won by 10.

00:46:16.460 | He's cranky, huge upset Republican Glenn Young can be

00:46:19.760 | Terry McAuliffe, former governor there. He was this was a huge

00:46:23.120 | upset McAuliffe was supposed to win. Youngkin 151 48. So that's

00:46:28.420 | a 13 point swing versus where Biden was just a year ago. In

00:46:35.540 | New Jersey, a state that Biden won by 16 points, the Democrat

00:46:38.840 | held on to it, but only by 1.5 points. And I bet you anything,

00:46:41.580 | the RNC is kicking itself that didn't give any money to

00:46:45.020 | chatarelli, who's the challenger, who I think almost

00:46:47.940 | who came very, very close. And there were down ticket seats

00:46:52.380 | that went Republican so that the this is really interesting in

00:46:58.740 | South Jersey, which is a blue collar bastion for Democrats.

00:47:02.040 | We need versus burr. That's right. The Democratic State

00:47:05.760 | Senate leader Steve Sweeney lost to a truck driver named Ed Durr

00:47:09.240 | who spent a grand total of 153 years in the Democratic Party.

00:47:11.020 | 153 dollars on his campaign okay so those were some and then we have some other write-in like

00:47:17.500 | he was printing on the lawyers to say write me in I think I don't think is a writing but but any

00:47:21.880 | event so so implications for 2022 Dave Wasserman of cook political report calculates somewhere

00:47:27.580 | between a 44 and 51 c game from the gop they only need five C's to win the majority so it's looking

00:47:33.760 | very bleak for the Democrats in 2022 and then I think you also had some very interesting local

00:47:39.820 | elections in Minneapolis voters rejected a proposal to defund the police with 56 of the vote

00:47:46.120 | uh they there was a ballot proposition to change the police department into some sort

00:47:51.880 | of larger public safety group voters were having none of it in Seattle which is a very

00:47:58.240 | liberal city they voted for a literal Republican as city attorney which is the office that

00:48:03.460 | prosecutes misdemeanors so against a police abolitionist who said she would stop prosecutor

00:48:09.760 | shooting misdemeanors you're forgetting that in Virginia it wasn't just Glenn Youngkin that won but

00:48:15.100 | basically it was Terry McAuliffe and then a lieutenant governor who is some milk toast

00:48:20.920 | individual and an attorney general candidate who was caught in blackface which by the way there is

00:48:27.580 | no more racist thing you can do just to let you guys let everybody all the non-colors okay guys

00:48:35.020 | please don't do blackface or brown face it's such a bad it's just not it's not you're right it was a

00:48:39.340 | huge so so the lieutenant and Youngkin and it was a it was a black female Lieutenant Governor and a

00:48:44.320 | Latino attorney general that's right and they swept right that's right that's right so the

00:48:48.760 | Lieutenant Governor was Winston Sears uh she's a a black woman Republican if you've seen the photo

00:48:54.160 | of her she's frequently photographed with a giant assault rifle in her hands uh that's her and then

00:48:59.620 | uh a Hispanic attorney general Jason meari's uh one as well so yeah it was a huge sweep

00:49:05.740 | and then you know in Long Island and Staten Island which again are

00:49:09.280 | blue counties you had two Republican prosecutors beat the local sort of uh incumbent Democrat

00:49:16.060 | decarcerations DA's red just I think I think this is very clear which is um Trump was behaviorally

00:49:25.660 | extreme and after four years people were sick of it nobody wanted that behavioral extremism because

00:49:32.140 | it was unpredictable and people felt frankly in danger and I think that that was legitimate he

00:49:36.940 | also turned out to be extremely lazy

00:49:39.220 | and probably pretty dumb now what we're realizing is the different form of extremism which is policy

00:49:45.520 | extremism will also be met with the same response which is that you you can't sustain election

00:49:50.320 | results and wins right so people care consistently about three things they care about the economy

00:49:55.960 | they care about the education of their children and they care about safety

00:50:00.280 | and the thing that Glenn Youngkin did which I thought was at least a playbook for centrists

00:50:09.160 | and the right and it's also a playbook for the Democrats if they choose to embrace it is to

00:50:13.780 | understand that these things are reaching a tipping point where you know again we've said this before

00:50:19.060 | it is possible to live in a state of mind where you believe in Black Lives Matter and you believe

00:50:24.880 | in law and order right and and when you try to pit those two things against each other for example

00:50:31.120 | like you would have thought the one place where they would have basically defunded the police in

00:50:36.400 | its entirety would have been Minneapolis after George Floyd but it's not going to happen it's not

00:50:39.100 | going to happen but instead even they drew the line and said no or New York or New York there was a

00:50:45.340 | there was a really compelling quote actually by this woman I think it was in the New York Times

00:50:49.420 | um and what she said was I didn't elect Joe Biden to be FDR I elected him to tack to the middle and

00:50:57.460 | just calm things down so that everybody could exhale so that we could reset same with me and

00:51:02.920 | what's that that was Abigail spamburger actually she's a Virginia Democrat yeah she's a Virginia

00:51:07.840 | Democrat who won

00:51:09.040 | a seat in one of those blue counties that just flipped red to vote for Youngkin and since she

00:51:14.380 | got elected I guess she got elected last year she's been telling the Democratic she's the one

00:51:19.120 | who called out Pelosi in that you know caucus meeting saying I don't ever want to hear the

00:51:24.040 | words defund the police again that is electoral poison and then she said yes nobody elected Biden

00:51:28.720 | to be FDR they elected to be normal and stop the chaos and so yeah certainly my vote yeah

00:51:34.300 | yeah there's a big backlash going on because Biden has decided to start governing like Bernie Sanders

00:51:38.980 | so do that so sacks is the lesson Dems learned this time around is it's very easy to beat

00:51:46.240 | Trump but it's very hard to beat a moderate Republican no no it's not that it's like you

00:51:52.480 | just have to be a rational normal person that's what I mean by a moderate Republican well you

00:51:57.760 | just have to be moderate I don't think it matters but this is but this is the key but that's the

00:52:01.600 | Dems it was so easy for them to use Trump you know but these three topics are not a Republican tent

00:52:08.140 | poll nor are they a Democratic temple they are the tent pole of reasonable people yes meaning which

00:52:14.080 | most people are reasonable hey guys get out of the way so that we can you know have a reasonable life

00:52:18.460 | in an economy hey folks please make sure my kids when I send them to school for eight hours a day

00:52:23.500 | come back reasonably educated and please keep my streets safe and I'm not really willing to

00:52:28.120 | decarcerate ad hoc to such a degree that all of a sudden crime gets out of control those

00:52:33.520 | are not Democratic or Republican tent poles those are just moderate centrist rational things to do

00:52:38.080 | things to believe in yeah being and also behave normally like I I think whatever happened with

00:52:43.060 | these progressives where they couldn't pass you know the stimulus bills and things that almost

00:52:47.740 | everybody agreed on Glenn Youngkin was not behaviorally extremist yes and and from a policy

00:52:54.040 | perspective was pretty much down the middle Eric Adams Eric Adams is not behaviorally extreme and

00:53:01.300 | he is politically down the middle the mayor of Buffalo who got re-elected is not behaviorally

00:53:06.820 | extreme and he's been elected to the Republican Party and he's been elected to the Republican Party

00:53:08.020 | he's politically down the middle do you start to see a pattern here yeah nobody wants AOC Bernie

00:53:12.760 | Elizabeth Warren or Trump I think it's not it's not a question of AOC or Bernie or Trump it's just

00:53:18.160 | that right now the temperature of America is let's just all exhale and just recenter ourselves as a

00:53:25.600 | country yeah and so moderation and centrism is actually what calls for today I don't know how to

00:53:31.720 | predict what happens in 15 or 20 years and maybe AOC is the canary in the coal mine for where the

00:53:37.960 | world goes by a plurality of people in 15 or 20 years but what's clear is it's not where it goes

00:53:43.420 | today and I think that we it all behooves us to just take a real step back and exhale and just

00:53:49.060 | read the tea leaves because every single thing that the Democrats tried to do to sort of like

00:53:54.760 | make this extreme really didn't work the race baiting all of that stuff really kind of failed

00:54:00.100 | and I think that that's important to listen to you know because you had a lot of black Indian Chinese

00:54:06.100 | families that just showed up Hispanic

00:54:07.900 | you know that again reliable Democratic voters and voted for Glenn Youngkin in a way that was

00:54:15.460 | surprising to me right and then so if you compare New Jersey and and Virginia Biden won Virginia by 10

00:54:23.260 | he the the Democratic nominee lost Biden won New Jersey by 16 and Phil Murphy barely

00:54:32.380 | squeaked by it was like 10 000 votes Jersey's always had a a Republican kind of

00:54:37.840 | leaning group uh they're very uh too Biden won by 16. this should have been a cakewalk yeah but I

00:54:43.000 | think that's 16. how much of that is get Trump out of office is what we I think the Democrats need to

00:54:48.400 | parse and I blew it by going to radical we're repudiating behavioral extremism and policy

00:54:54.160 | extremism so I think we just need to realize rational normal chill people

00:54:59.140 | who can do reasonable things get our kids educated so for example on the education front

00:55:04.060 | um I don't know if you guys saw this because I tweeted and you can put this Nick in the

00:55:07.780 | group chat but in California right now there's a battle over math class ridiculous right where the

00:55:14.140 | title I'm just going to read the title because it sets it off California tries to close the

00:55:17.440 | gap in math but sets off a backlash proposed guidelines in the state would de-emphasize

00:55:22.600 | calculus reject the idea that some children are naturally gifted and build a connection

00:55:28.240 | to social justice critics say math shouldn't be political well of course the way that those

00:55:34.180 | articles are always written it's always about the backlash you know they don't talk about

00:55:37.720 | what what the people in charge are trying to do to basically degrade the curriculum of course there's

00:55:42.820 | a backlash because parents don't like put the people on these school boards are doing this

00:55:47.080 | was the sleeper issue in Virginia was the school board issue you had um you know parents were

00:55:53.020 | already angry that the teachers unions had kept the schools closed for a year and a half during

00:55:57.340 | covet and while their kids were at home you know work doing classes over Zoom parents got a good

00:56:03.460 | look at what some of their kids were learning and didn't like what they saw I mean we're talking about lessons

00:56:07.660 | plans that incorporated CRT and you know the 1619 Project view of America singling out kids by their

00:56:14.500 | race making them focus on difference and then there were some you know rather explicit materials

00:56:19.960 | at young grade levels about you know LGBT issues and so this led to a whole bunch of confrontations

00:56:25.660 | at school board meetings where parents of all races objected to you know the least lesson plans

00:56:31.720 | for their kids and the school boards and administrators just dismissed their complaints out

00:56:36.160 | of hand and you know their

00:56:37.600 | message was well we're not teaching CRT to your kids uh but if we were it's a good thing and only

00:56:42.400 | white supremacists would object so you know that was sort of what was happening in the background

00:56:48.340 | and then McAuliffe comes along and makes this gigantic Gaff in the last debates about two weeks

00:56:53.860 | before the election where he says I don't think parents should be telling the schools what to

00:56:57.640 | teach and what yes this is with the customer no he said that he said that on a debate and he said

00:57:04.120 | that in a debate about two weeks for the election McAuliffe was leading through this whole thing

00:57:07.540 | until that debate where and this was sort of a Kinsley Gaff in the sense that you know Michael

00:57:12.400 | Kinsley said a Gaff is when a candidate inadvertently uh says something true you know this is McCullough's

00:57:18.700 | view is that the teachers Union should be controlling the schools not the parents well

00:57:22.480 | um yes so this is what yonkin uh jumped all over all of his ads in the last weeks of campaign really

00:57:30.340 | focused on this issue you know poured gasoline on a fire and then the most tone-deaf thing McCullough did is he had Randy

00:57:37.480 | Weingarten who is the head of the uh the big teachers Union come in and campaign for him at

00:57:42.520 | the 11th hour well of course that's not going to save him because people are sick and tired of the

00:57:46.840 | teachers unions so you know this was basically the big sleeper issue CRT and the schools in Virginia

00:57:54.340 | and you know this is this I think specifically is what the Democratic Party has to wake up to is

00:58:01.660 | that these progressive ideologies are not popular the other thing I'll say about Glenn yonkin is that

00:58:06.880 | this is another

00:58:07.420 | thing that the that the Republicans should hopefully pay attention to which is

00:58:11.020 | you can look normal act normal be normal you know this is not an extremist in any way this

00:58:19.360 | guy was the co-CEO of Carlisle which is a huge and very successful private equity firm so this

00:58:25.120 | is a very rational reasonable person who um you know didn't embrace anything that was really that

00:58:31.900 | pro-Trump and that should be a real wake-up call to the Republicans which is hey let's

00:58:37.360 | just run a fleet of normal people I think what you saw I think Chamath is right that what you saw in

00:58:43.180 | Virginia is that the playbook that Gavin Newsom just used to defeat the recall in California did

00:58:48.340 | not work in Virginia which is he tried to paint yonkin as a Trump proxy and youngkin very definitely

00:58:57.520 | you know avoided that he got Trump's yes he got Trump's endorsement but very early in the process

00:59:02.560 | he did not have Trump come to the state um and you'd have to say it also helped yonkin a lot

00:59:08.140 | that social media that Trump wasn't all over social media because he's been banned so you

00:59:12.880 | know in a weird way Facebook and Twitter deserve an assist here um because they helped keep Trump

00:59:17.620 | out of the Virginia race so you know this playbook that that Newsom defined that worked

00:59:23.860 | very effectively from California which is simply to keep running against Trump I think Democrats

00:59:28.660 | thought they'd be able to win elections for years based on that that playbook didn't even last two

00:59:32.500 | months so you know so I think Democrats are gonna have to find a new playbook here okay so Friedberg

00:59:39.520 | uh on this California issue around education one of the key or most controversial um concepts is

00:59:46.600 | detracking in other words instead of having high performing students go to a high performing track

00:59:51.460 | and then everybody else stay behind maybe keeps in not all cases but keep some of the students

00:59:56.920 | together because there is some research that shows if done right if you track people together

01:00:02.440 | the higher performing students will pull up the ones who are slightly behind other people say we're

01:00:09.160 | basically uh throttling people who could be the next Einstein or the next world-class leader in

01:00:15.400 | science math Etc uh any thoughts on the concept of detracking since I'm assuming you were in the

01:00:21.520 | high speed track in science and math maybe we should get rid of like JV and varsity sports teams

01:00:32.380 | to play baseball and Major League Baseball as well and you know any distinction of performance

01:00:37.360 | um or exceptionalism goes away you know and and that is kind of the the key social question is are

01:00:46.240 | we going to give up exceptionalism um to minimize uh the distance uh between the exceptional and the

01:00:53.440 | average and that seems to be what's happening makes people makes people feel bad but I've said

01:00:57.280 | this point before you know we're doing it when we try and think about you know the billionaire tax or

01:01:02.320 | you as soon as you start to limit progress um you reduce inequality but you limit progress and the

01:01:10.900 | same will be true not just in science not just in business but also in sports and athletics and and

01:01:17.920 | any other kind of system where you will have exceptionalism you will have an average you will

01:01:22.900 | have a distribution amongst human performance and as soon as we try and limit the difference in that

01:01:29.860 | distribution um we move the entire curve to the left here's the counter free bird

01:01:36.400 | um what some studies have shown is yes you will uh throttle the high performers but we're seeing

01:01:43.120 | along race lines certain demographics being left behind other ones excelling and that you can get

01:01:49.300 | yeah it's an ethics and values question right like do you think that individual freedom and

01:01:53.920 | the opportunity to pursue your opportunity your your exceptionalism um should be taken

01:01:59.800 | away from you such that others who aren't as exceptional as you are given um you know greater

01:02:06.340 | progress than they would have had on their own um and that's the key Crux of what all of these

01:02:11.200 | social systems are grappling with whether it's in sports or business or finance or or um or education

01:02:17.980 | is what's the right thing to do and that ethics question is going to be defined by the social

01:02:23.440 | agenda of the moment and you know the means of the moment and what we all think is is the right thing

01:02:27.640 | to do and it's different all over the world and it's different within political systems but it's

01:02:31.960 | a very divisive point that I think folks who find themselves on one end of that exceptional spectrum

01:02:37.420 | in different aspects are going to have one point of view and folks on the other end of that

01:02:41.320 | exceptional spectrum are going to have other points of view and everyone's going to be sensitively

01:02:44.920 | tuned to where they fall in that spectrum I will say one thing though on that spectrum exceptionalism

01:02:50.320 | is rarer than the average therefore it is likely the case that over the next years and decades we

01:02:56.140 | will see the um

01:02:57.580 | the idea that we should remove exceptionalism in business and exceptionalism in education

01:03:01.900 | exceptionalism in sports because it benefits the majority and um and and no one kind of

01:03:08.980 | recognizes and a lot of folks don't recognize the progress that is made by exceptionalism and

01:03:14.200 | um and that's and then we're going to wake up one day and be like oh wait a second we don't

01:03:18.340 | have the the best sports teams winning all the gold medals we don't have the smartest kids we

01:03:22.420 | don't have the best businesses China and Europe and Brazil and whomever else the emerging markets

01:03:27.520 | in India are going to start to have such a good point I think this is a very old debate it's the

01:03:32.560 | debate between a quality of opportunity and a quality of results yeah and the progressive

01:03:37.300 | left is absolutely obsessed with a quality of results or outcomes which they now call equity

01:03:43.000 | which is we're going to take people at the finish line and we're going to move them around we're

01:03:47.380 | going to redistribute the outcomes to achieve a more proportional representation or something

01:03:52.360 | more fair as opposed to giving everybody as much opportunity

01:03:57.460 | at the outset as possible that is the fixation right now that is why they're taking out advanced

01:04:02.560 | math in the schools they're trying to level people it's not going to work it doesn't lead to a more

01:04:07.300 | we want to have an exceptional Society where I think we should be focusing is creating as much

01:04:11.440 | opportunity for everybody the way to do that would be to let every child go to the school of their

01:04:16.660 | choosing so that we would stop trapping kids in bad schools but back to kind of bring this back

01:04:22.840 | to the election for a second because I think it was a very clear repudiation of this progressive mindset

01:04:27.400 | and I think there's essentially two sets of reactions to it if you look at sort of all the

01:04:32.740 | left-wing commentators the the one who I thought seemed to get it the most was CNN's Van Jones

01:04:41.560 | actually had I thought you know a rare moment of introspection where he said it was this was

01:04:46.780 | the the results were a five alarm fire he said it was a big big wake-up call for the Democrats

01:04:51.940 | to stop annoying voters with woke hectoring um he he actually advised Biden to start triangulating

01:04:57.340 | against the woke left in the way that Bill Clinton did I mean which is something that I've been

01:05:02.320 | suggesting on this this pod so you're saying something super important the game Theory now

01:05:06.820 | is for Biden to put to the test the progressive left because now he can go firmly to the center

01:05:13.240 | and he can put all of the pressure on the progressive left in the house and uh Warren and

01:05:21.400 | Bernie Sanders in the Senate well he's right that's the first thing he should do is he should

01:05:27.280 | he should pull a sister soldier on Bernie Sanders he he can't keep delegating the domestic agenda

01:05:32.740 | to Bernie Sanders he if he wants to save his presidency he'll start triangulating in the way

01:05:36.880 | that Bill Clinton did I'm not sure he's going to I think there's already a misperception that

01:05:42.100 | the reason why they lost selection is because they didn't deliver the goodies in this house

01:05:47.380 | reconciliation bill um that in other words I don't think the public cares about the goodies I mean

01:05:52.540 | they care about this normalcy and centrism yeah there's a part of the network right base that does

01:05:57.220 | the what's in that house reconciliation bill but but here's the thing Democratic turnout in this

01:06:02.440 | election was extremely high the Democratic turnout for McAuliffe was higher than the Democratic

01:06:08.620 | turnout four years ago for the Democrat who won the the turnout that uh in New Jersey was higher

01:06:14.560 | than what Murphy got four years ago when he won the problem the Democrats have is that Republican

01:06:19.600 | turnout was extremely high even without Trump showing that Trump doesn't matter that much

01:06:23.860 | uh to turn out and the Independence came out in

01:06:27.160 | a big way for Republicans so this idea that Democrats can just win elections by delivering

01:06:33.520 | you know uh programs for their base that's not going to work so I think that's a misperception

01:06:39.100 | I think Van Jones has the right idea they need to triangulate but you turn the channel to MSNBC

01:06:44.260 | and they were just blaming the whole thing on white supremacy basically hysterical

01:06:47.980 | um just on the detracking thing this shows to me a severe lack of creativity

01:06:53.140 | you if you look at what happened in the NBA they had this developmental

01:06:57.100 | league which they didn't kind of run then became the G League they now have the ability to bring

01:07:01.180 | players fluidly from the Warriors G League team up to the Warriors or the Knicks team up to the

01:07:06.640 | Knicks what this means is you don't have to say there's two different tracks and the the two never

01:07:12.400 | shall meet in the season they can move up and down in math a very easy solution to this would

01:07:17.980 | be to have the high track for high performers have the regular track and then spend with all

01:07:22.540 | this money we have say hey every school is going to be open from three to five o'clock

01:07:27.040 | four days a week if anybody wants to attempt to get into a higher track of math just stay after

01:07:33.520 | school for two hours anybody can go and get one-on-one tutoring and just double the number

01:07:38.320 | of teachers the whole country wants excellence they don't want leveling they don't want equity

01:07:43.660 | they don't want a quality of results they want to have a quality of opportunity people to move

01:07:48.460 | up they do want to see that's true and that's students and immigrants do better at math that's

01:07:53.200 | what you're missing yes and that's about a quality of opportunity absolutely no it's not

01:07:56.980 | just about a quality of opportunity they're so far behind statistically that you need to do

01:08:00.760 | something new what we're doing is not working David that's why people are picking this bad

01:08:05.320 | decision they are eliminating advanced math because they don't want to actually look at

01:08:10.960 | the the problem what do you see the problem is well if there's an underperformances starting

01:08:15.460 | group then you should work hard to raise them up not eliminate the subject give me a suggestion

01:08:19.960 | charters and school choice okay look I mean if you're if you're going to define structural racism

01:08:26.920 | as conditions that that trap people of color in poverty across Generations seems like a pretty

01:08:32.740 | fair definition then you have to say the number one cause of structural racism is the school system

01:08:38.140 | education yeah it's the school system because we know poor kids are trapped in schools that aren't

01:08:43.720 | very good why because they're controlled by the education unions they don't have a choice they

01:08:48.280 | don't have money so who is making that argument uh on the on the side of the left no one why

01:08:54.040 | because everyone knows the unions especially the education unions

01:08:56.860 | are the number one donor to the Democratic Party so the Democrats won't even look at this problem

01:09:00.760 | all they'll do is the way is blame white supremacy could build their base is by saying we want to fix

01:09:06.940 | education that would be if you they are education what do you think young industry in Virginia by

01:09:10.960 | the way 55 of Hispanics in Virginia voted for Youngkin so minorities are shifting on this issue

01:09:18.280 | based on charters and school choice private chat these are the new quality of life issues if Youngkin has a good four years

01:09:26.800 | in Virginia he can run for president and crush this thing can I show you just one chart and then

01:09:31.060 | we can get off the politics thing which is it was this chart from this guy Patrick uh Ruffini who's a

01:09:36.760 | pollster and I think it really illustrates the problem that progresses the Democratic Party for

01:09:41.860 | the listeners okay so what this chart shows is it basically shows where the Democratic the Democratic

01:09:50.080 | Party is in the Senate Republican Party is in relation to the center of the country okay and

01:09:55.540 | basically as you'd expect

01:09:56.740 | in a democracy whichever party is closer to five wins okay so in 1994 when Bill Clinton was president

01:10:04.300 | the Democratic Party the center of it was smack dab as five the Republicans weren't that far away

01:10:09.760 | they were a six so the party even though there was a lot of partisan warfare the the political

01:10:16.060 | differences actually weren't that great and Clinton I think more accurately found that dead

01:10:21.280 | Center okay fast forward to 2004 so George W Bush is president now the Democrats are

01:10:26.680 | at four Republicans are at five that's why Republicans won okay now go to 2017 these poll

01:10:32.980 | numbers he did and this is a few years ago the Democrats are all the way at two okay and the

01:10:39.220 | Republicans are at six and a half so it's true that both parties have moved away from the center

01:10:43.900 | but Republicans are one and a half points away from the center whereas Democrats are three

01:10:48.400 | points away so the Democrats have actually moved further away from the center if you

01:10:52.360 | look at who are the activists in the Democratic Party who is the base who is

01:10:56.620 | the energy who does all the work who does the contributions it is the progressives right this

01:11:01.780 | is why McAuliffe ran as McAuliffe is not a progressive he was a Clinton Democrat you

01:11:07.480 | know going way back to the 90s okay he was Bill Clinton's you know right-hand man in the party

01:11:12.820 | back in the 90s but he nevertheless ran as a progressive in Virginia who supported the

01:11:19.300 | teachers unions why because he was appealing to the base of the party Gavin Newsom did the

01:11:23.320 | same thing in California Gavin was never a Bernie bro he

01:11:26.560 | I mean he's always been liberal but he he has moved very far left and Biden has moved very

01:11:32.080 | far left as president why is that because the base of the party has moved very far left so

01:11:37.840 | unless that gets fixed I see maybe the party's base but not the country's exactly so you're

01:11:45.100 | going to need a strong Democrat who can basically give the Heisman to that part of the base or

01:11:51.220 | they're going to keep losing elections I think this could be a Republican decade I know it

01:11:55.060 | doesn't seem like it right now because

01:11:56.500 | you had Trump and the Republicans lost but look how quickly the Republicans turned around their

01:12:01.480 | electoral fortunes so with Trump on the sidelines then that's just a huge detriment yes if Trump is

01:12:08.440 | the nominee in 2024 all bets are off but in 2022 he's not the nominee he's still

01:12:13.240 | censored from social networks he's really nowhere in sight and people people have a very short

01:12:20.200 | um memory it turns out they've moved on very quickly Young can check the box because he felt he

01:12:26.440 | had to to get the nomination and to run on the Republican platform but then you think Young

01:12:32.260 | is going to talk to Trump once no not once and I and I think and I honestly think this election is

01:12:37.900 | going to help Republicans move past Trump because what Republican believes in um in like that the

01:12:43.780 | electoral system is rigged now right I mean all these blue cities and states just delivered big

01:12:49.180 | results for Republicans so where exactly is the ballot stuffing where exactly is the stole where

01:12:54.880 | the stolen elections that's gonna that's gonna stop now too they're gonna stop it's gonna stop

01:12:58.360 | overnight right because I mean by the way Kristen cinema probably knows this like you know the the

01:13:03.220 | the funny thing about all of this is when Peter Teal put in 10 million dollars into this pack for

01:13:07.720 | Blake Masters who used to work for him and said you know in Arizona I'm gonna run this guy against

01:13:12.880 | you cinema attacked hard to the center instantly so she she knew too yeah well so just just a small

01:13:20.800 | point of course so Blake is running against uh the other guy um the astronaut guy I'm facing on his

01:13:26.140 | name but but yeah but but cinema is up so to speak uh in the next election cycle so she got a little

01:13:31.360 | bit more time but you're right like cinema is attuned and Mansion is attuned they are some of

01:13:37.060 | the few Democrats that are attuned to where the center of the country is you heard Mansion in the

01:13:42.160 | wake of this election said this is a center-right country these guys better wake up um you know they

01:13:47.260 | should really now look I think I think what's going to happen in the wake of this election is

01:13:50.740 | that this infrastructure bill is going to sail through because one of the crazier things that

01:13:55.060 | the progressives were doing was holding that bill hostage it might have helped McAuliffe I don't

01:13:59.500 | think it would have I don't think McAuliffe would have won but it might have helped him by a point

01:14:03.100 | or two if they had gotten that infrastructure bill done because a lot of those programs are

01:14:06.880 | going to be popular in a state like Virginia okay but I mean but but I think that you know

01:14:11.920 | this house reconciliation bill they just seemed hell-bent on jamming it through with all these

01:14:15.580 | tax increases I don't I don't think that's not popular you know what the big issue in New Jersey

01:14:20.680 | for them yeah one of the big issues in New Jersey where you almost had this upset within one point

01:14:25.000 | was taxes you know um there was a a gaffe by Murphy who said something like you know he said he said

01:14:33.340 | that if if taxes are someone's chief concern he said quote maybe we're not your state can you

01:14:38.020 | imagine that wow and he almost lost the election because of that so I don't think all these big tax

01:14:43.540 | increases are what the country wants and you know if Biden insists on allowing Bernie to dominate

01:14:50.620 | Warren I think it's gonna you're gonna see 40 to 50 seat losses by the Democrats in 2022. okay moving

01:14:58.180 | on to our final topic crazy update out of China a research team has developed a method of converting

01:15:06.400 | carbon dioxide into starch Science magazine published this paper from a research team 100

01:15:12.040 | grams of catalysts converting five grams of CO2 per hour into starch um and uh freeberg I saw you

01:15:20.560 | said that this is 10 times more efficient than corn plants uh what's the impact of something

01:15:25.960 | like this could it hit scale would it have an impact on food security carbon global warming

01:15:34.120 | yeah so I tweeted this paper out because it's just it's a fantastic demonstration of what's

01:15:39.940 | possible in this new emerging not emerging it's been around for a long time but kind of

01:15:44.980 | you know in the state of art in um in biomanufacturing you know photosynthesis

01:15:50.500 | is the system by which most starch is produced on planet Earth today that is plants convert sunlight

01:15:56.380 | and use water and carbon dioxide to make starches and starches um and and sugars which are what

01:16:03.640 | carbohydrates are account for 60 percent of human calories and we get all those calories from rice

01:16:09.460 | wheat potatoes which you know are grown on about 60 percent of our acres that we farm on planet

01:16:14.860 | Earth so you know in in plants there's a series of these chemical reactions and what these guys did is

01:16:20.440 | um isolated and created a couple of specific proteins which are a class of proteins called

01:16:29.440 | enzymes and what an enzyme is is it's a protein that can take different molecules and combine them

01:16:34.660 | and re and force them to react and make something new and they identified a couple of enzymes and

01:16:39.700 | engineered a few enzymes and put them together in a cell-free system meaning there's no cells

01:16:43.960 | involved it's just a tank with a bunch of fluids in it and and they stick in some carbon dioxide

01:16:50.380 | that they can suck in from the atmosphere and they um they can and they have to drive it with

01:16:55.000 | some hydrogen gas which we can just get from water and the system basically converts that

01:17:00.460 | carbon dioxide into starch which is uh being done at a rate that's almost 10 times higher than what

01:17:06.580 | we see with um with corn plants so it's it's an incredible demonstration there's there's several

01:17:12.220 | steps to the system like six steps and I did some back of the envelope math and my back of

01:17:16.780 | the envelope math on what they've demonstrated and and by the way everything they did

01:17:20.320 | is publicly available for reproducibility so people are going to try and resource open

01:17:25.240 | source so people are going to try and copy this now but my back of the envelope math is um you

01:17:30.460 | know uh this system can produce about 10 grams of starch per liter per day which would mean it

01:17:37.540 | would take about 2.7 trillion liters to suck up all of the carbon dioxide that all of humans are

01:17:44.920 | putting in the atmosphere every year from all of industry that would require um about 27

01:17:50.260 | million tanks that are about 40 feet tall and about 8 feet wide that whole all of those tanks

01:17:55.720 | could fit in an area about 25 by 25 miles you could attach one nuclear reactor to it to suck

01:18:01.360 | up the uh the water and convert it into hydrogen gas and feed this system and those tanks 25 miles

01:18:08.200 | by 25 miles would take out all of the carbon dioxide on planet Earth and convert it into usable

01:18:15.040 | starch and that starts by the way that system could be tuned not just to make starch for consumption it

01:18:20.200 | could make biofuels it could be used to make bioplastics it could be used to make anything

01:18:24.820 | that's hydrocarbon based um and so you can kind of think about this being the entry point to a

01:18:30.220 | series of production systems that we could use to make stuff why did they open source it

01:18:34.960 | so they're a research team of scientists from China and they've been iterating on this this

01:18:40.360 | process this isn't the only process right and so what they're showing is that this is possible

01:18:46.780 | and what I think we will see is a lot of people

01:18:50.140 | battling their brains now saying not only do we use proteins and enzymes that we find in nature

01:18:55.000 | but we're going to start to engineer our own proteins and our own enzymes that are even more

01:18:59.020 | efficient than what we see in nature and that's what's starting to happen this system alone what

01:19:03.700 | I just described this 25 mile by 25 mile system which is tiny is the equivalent of starch production

01:19:09.820 | from 42 U.S corn belts if you took all the corn growing in the United States it's 42 times that

01:19:15.520 | um is what it would produce that's my back of the envelope math of kind of what these guys did

01:19:20.080 | um and so I think what they're showing is this is incredibly yeah yeah and and the implications we

01:19:25.180 | could go in a hundred directions and we could talk for an hour about what this means and what

01:19:29.200 | you could do with it but I think it it really catalyzes this this point that that that we're

01:19:34.600 | kind of everyone's always like how are we gonna get all this carbon out of the atmosphere what

01:19:37.840 | are we gonna do with this where there's a will there's a way the science is here today 27

01:19:42.700 | million tanks made out of plastic you could probably get that stuff produced you know a

01:19:46.420 | couple billion dollars find a piece of land that's 25 by 25 miles that's near the end of the year and

01:19:50.020 | it's near some water and put a nuclear power plant there and you could suck up all the CO2 in the

01:19:54.460 | atmosphere anybody want to take anyone but you want to take a guess of how many people on the

01:19:58.300 | team were in advanced math courses the funny thing about this that I think is really interesting is

01:20:04.420 | that it came at the same week where we were ending you know what was this political theater of cop 26

01:20:09.700 | you know Greta Thunberg uh who's you know how dare you how dare you she had this very funny comment

01:20:19.960 | like uh you know it was a bunch of corporate nonsense and the same old blah blah blah was

01:20:24.100 | her description of cop 26. you know we had this great trickle of like you know agreements there

01:20:30.880 | was like on Monday there was an agreement to stop deforestation uh and then you realize it's a non-binding

01:20:37.120 | agreement and you're like oh okay well I guess we're not gonna stop deforesting we're just gonna

01:20:41.320 | keep you know doing that and all of this stuff just kind of like took a lot of my enthusiasm

01:20:47.140 | um and I was a little despondent

01:20:49.900 | about what was going on and then when I saw this thing I was I was really quite impressed

01:20:53.620 | I will say that there's a very tricky thing happening right now which is that developing

01:20:59.260 | countries basically said listen if you want us to go after climate change we want 1.3 trillion

01:21:05.260 | dollars a year to support us and so you know the western world will have to figure out whether

01:21:10.720 | we're willing to pay you know what is the equivalent of you know six or seven percent

01:21:14.860 | of U.S GDP to a whole bunch of other countries every year for them to slow down and

01:21:19.840 | if we don't make these payments to India and China and a bunch of other developing nations

01:21:23.620 | they they have said we're just going to continue to do what we're going to do here's an idea take

01:21:28.060 | half of that money and put it towards science yeah take half that money and go build a plant

01:21:32.500 | that uses this system that was just demonstrated and put it in South Texas and suck up ocean water

01:21:37.360 | and convert that ocean water into hydrogen gas great jobs by the way ocean water can be turned

01:21:42.160 | into hydrogen gas by running electricity through it so you're putting a nuclear power plant to

01:21:46.240 | protect the electricity you run it through ocean water you create hydrogen gas you pump it into

01:21:49.900 | these freaking tanks and it sucks up all the CO2 and it makes stuff that humans can consume and

01:21:54.580 | that we can use and suddenly you have this abundance of material you have this abundance of

01:21:59.320 | food and you can turn this and jobs and you can turn this into a lot of different things and you

01:22:04.600 | know this kind of goes to the point I've been making for a while if we want to invest in

01:22:07.840 | infrastructure this is the sort of thing that both solves climate change creates jobs and has

01:22:13.240 | extraordinary economic return potential built into it so how does it get politicians re-elected

01:22:19.060 | you know I think the private market may come after this stuff I'll be honest I'm you know I'm like I'm

01:22:23.620 | talking to people looking at this being like why don't we make a plant that we can make biofuels

01:22:27.100 | and bioplastics and food and other stuff out of this uh this technique and there's going to be

01:22:31.000 | other iterations of this technique um but it's such a no-brainer cost like a functional prototype of

01:22:36.460 | this like a small prototype nothing right I mean a couple million bucks yeah like nothing so um

01:22:42.040 | the other thing

01:22:43.180 | that happened this week beyond this request for 1.3 trillion dollars is that you know we're now

01:22:48.160 | seriously considering carbon tariffs and we talked about this on a pod before but

01:22:51.340 | you know I've said I think this is the most disruptive thing in the capital markets and

01:22:56.680 | and geopolitics that can happen in the next 10 or 20 years is an effective carbon tariff

01:23:01.060 | which is to say that when a good or service enters the borders of a country they will

01:23:06.220 | levy some tax that they think represents its drag on the environment and so you know

01:23:12.880 | um the simple example would be a car you know you make a car you make a Tesla

01:23:17.320 | in Texas but the minute it crosses the border to Canada Canada says well here's the true carbon

01:23:25.420 | intensity of this car all of the energy that you put into the aluminum to the batteries

01:23:30.580 | you know to the to the buildings where the engineers sat that were that were building FSD

01:23:35.740 | and uh you know I'm going to charge an eight thousand dollar tax on this car or iPhones coming

01:23:41.680 | to China yeah that's happening I think that's coming so I think that you know the combination

01:23:46.000 | of tariffs and these transfer payments is going to create a real economic incentive for folks to

01:23:52.300 | make these kinds of big technological Leaps so I'm pretty bullish on all of that I'm less bullish on

01:23:57.760 | politicians ability to organize because unfortunately again this is the first time I

01:24:02.200 | really paid attention to cop and it just looked like a bunch of really you know you know it's just

01:24:09.400 | a lot of political theater Sachs does this uh science conversation about saving the planet do

01:24:13.180 | anything for you would you like to get back I mean I think it's the way to solve the problem is you

01:24:17.140 | have to figure out new Technologies to actually take carbon out of the atmosphere because you're

01:24:21.940 | not going to do it through you know these political programs I mean you know China India

01:24:28.180 | paying them and another developing nations 1.3 trillion a year I mean foreign aid already is

01:24:34.480 | one of the least popular parts of of the government's budget you're going to now

01:24:39.100 | pay 1.3 trillion to these countries so that they it's nonsense and you're going to pay

01:24:44.260 | technology that solves the problem nobody's gonna stand for that yeah and you know the the education

01:24:52.720 | system right pour it in yeah I don't think there's a political solution to this problem that's going

01:24:57.940 | to be palatable to people I think it's going to have to be solved through new technology now let

01:25:02.860 | me ask you a question freeberg you said there's a six-step process given your experience building

01:25:07.960 | science and technology

01:25:08.800 | products is it possible for each of those six steps to get but 20 percent more efficient a year

01:25:14.920 | yeah look I mean um I just say that to describe that there's a series of steps in the system it

01:25:20.680 | you know um but uh at the end of the day this is a demonstration of science that has been you

01:25:27.160 | know probably funded to some small amount but you know if you start to iterate on this approach and

01:25:31.960 | think big picture and think infrastructure solution here uh there's a lot of room for

01:25:36.220 | improvement I'm sure so in other words you're back of the

01:25:38.500 | envelope 25 by 25 mile if this is getting 50 more efficient 25 more efficient year over year we could

01:25:45.820 | see it becoming you know uh twice as efficient every two to three years and your 25 mile might

01:25:51.580 | be a five mile radius City I mean think about going to Mars right what are we going to do in

01:25:55.000 | Mars we're not going to grow friggin fields of corn and grow cows and stuff right you're going

01:26:00.040 | to need a system that literally takes the molecules that are in the atmosphere there

01:26:03.820 | uses some electricity that's probably going to be produced by a nuclear power plant and convert those

01:26:08.200 | molecules into what you want to make and consume and that's what we can do on Earth today the

01:26:12.940 | systems are going to get better they're going to get cheaper they're going to get faster and that's

01:26:16.720 | why I'm highly optimistic about solutions to climate change in the century it's not about an

01:26:22.060 | if it's about a when and you know the when is going to be defined by the willpower of how we

01:26:26.560 | are going to allocate our people and our capital resources to solve these problems in the near term

01:26:30.520 | we have the tools to do it I love the fact that we're sort of hitting this fork in the road

01:26:34.900 | where it's like do we just want to give the money to a bunch of governments

01:26:37.900 | to pretend they're going to solve this and grifters or do we want to put it into science

01:26:42.280 | technology Innovation and entrepreneur hand entrepreneur former that execute execute

01:26:48.220 | what'd you say I picked the former we should yeah let's give it to politicians who don't know what

01:26:54.760 | the they're doing I mean it really is like when you know I don't know if you saw Elon say like

01:26:59.320 | yeah if you want to solve world hunger can you make us can you make a spreadsheet let's talk

01:27:03.340 | about that that's just so beautiful I thought that was like the greatest that's dunk of the week

01:27:07.600 | nothing nothing gets me up in the morning like funding shenanigans right tell the story I mean

01:27:12.700 | just somebody was like oh Elon you know made more money Tesla stocks no no an article it was an

01:27:17.560 | article that was written sure and then he's like well if you want to solve world hunger I'm willing

01:27:21.100 | to sell shares Jason can you describe it you're doing such a shitty job today as a moderator what

01:27:25.420 | are you talking about all I did was put assist in your hands you guys dunked everything that's it I'm

01:27:30.880 | out there was an article's voice do it in his voice yeah hey guys and there was an article so

01:27:36.700 | there was an article that was written that basically said you know um you know 6.8 billion

01:27:44.200 | dollars uh which is you know what Elon made like in a day or something could cure world hunger and

01:27:53.200 | then the head of the you know uh U.N World Food Program retweeted that again trying to further

01:27:59.800 | Dunk on Elon and then um Elon responded well if you can just show me a plan and just please reply

01:28:06.400 | in line here on Twitter and it's credible and detailed I'll just sell you know this stock and

01:28:11.680 | I'll give it to you and uh everybody was like oh my God there was this oh my God moment like wow

01:28:17.620 | can this really happen ending world hunger sounds like a beautiful idea it can only does only cost

01:28:23.560 | you know 6.8 billion dollars and obviously it went nowhere because the guy didn't have a plan and it

01:28:28.120 | was just a complete joke but that's what happened yeah and he's like yeah just put all of your uh put

01:28:36.100 | all of your expenses out there show us your plan and it was like oh crickets nothing all right

01:28:42.940 | everybody on behalf of the dictator Chamath polyhapitia the queen of quinoa the Sultan of

01:28:48.940 | science David Friedberg and for the Rain Man himself reporting from definitely reporting

01:28:55.360 | from yeah he's reporting from the New York Stock Exchange congratulations again my bestie David's

01:29:00.880 | axe on the triumphant IPL of bird we'll see you all next time on the online podcast.com.

01:29:05.800 | let your winners ride Rain Man David Sass

01:29:12.460 | and it said we open source it to the fans and they've just gone crazy with it love you

01:29:19.900 | besties are gone

01:29:29.560 | that's my uh dog taking a notice in your driveway

01:29:33.100 | sex

01:29:33.640 | oh

01:29:34.420 | yeah

01:29:34.900 | yeah

01:29:35.500 | oh man

01:29:36.640 | my

01:29:37.200 | we should all just get a room and just have one big huge orgy because they're all just useless it's

01:29:42.880 | like this like sexual tension but they just need to release them out

01:29:45.580 | what you're a beat

01:29:48.100 | we need to get merchies

01:29:53.380 | I'm doing all in

01:29:55.240 | I'm doing all in

01:30:03.220 | you

E54: Spread trading big tech, capital allocation, Zillow's misfire, Progressives suffer losses

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