Jake out do you have intros today no I don't have time for intros oh come on all right fine he started as a nerd with no followers on Twitter now he's a nerd that gets recognized when leaving the [ __ ] he turned water into wine he just wants to please us now he's a mixture of Kermit defrog and a science nerd Jesus he's the man with the stands
the queen of quinoa the Sultan of science the prince of Prozac the Lord of Lexapro he gets stops for selfies all over town my producer fee gave him a mental breakdown the zultan of Zoloft Mr David Friedberg it's true it did give me a breakdown but you're over it now you just name dropped three ssris in that intro is incredible well I talked to his
I talked to his psychiatrist he said he's working on the cocktail yeah save some for me oh oh you speaking of you he's got a very quick wit and impeccable grammar known for building beautiful products that don't work oh my God like Colin and Yammer he used to invest in SAS quite a lot now he's fighting a brigade of Ukraine Bots he's spending so much time
in his bunker it's starting to get smelly we see him only three times a week all in Tucker and Megyn Kelly he'd invest in your startup if you had the Knack but right now he needs that cash for his GOP Super PAC the world's biggest [ __ ] the Rain Man himself Mr David sacks that's all that's a repeat joke that's not I know but it kills every time so I'm gonna
keep repeating it until you tell you it's friends with his white truffles he scaled Facebook to a billy that wine collection it's just [ __ ] silly he's on the world tour meeting with princes and kings is he talking luxury sweaters or maybe bigger things the dictator himself chamath polyhapatia that was really nice actually wow I mean I
appreciate it you were obviously trying to get invited to dinner tonight because I'm trying to get off the alternate alternative list he's trying to get off the alternate that the email was harsh nine was alternate all right you were trolling me I know I have a seat as for me I'm the world's greatest moderator who can take a note compared to these
guys I'm just a millionaire who's broke the all in Summit almost killed us but we came back from Death store I knew he peaked when Friedberg took over the Dance Floor we love the fans but we love each other more thanks for the first 100 fellas here's to 100 more really good wow that's really really good look at you touching surprisingly you came prepared today
first time he fought after 100 he finally to prepare so that was the note just prepare your job just do your job do your job do your job do your unremutirated job do your job speaking of unremmediated we heard that somebody's grifting off the Pod oh yeah so good point what we heard sex is that you got a big care package from Montclair yeah that's true what what I
think we're all going to declare today is that we all want to wet our beak and if Montclair sends each of us a care package we will all wear Montclair gear at episode 100 of course my brand go to your own brand yeah we decided to jamasca Laura piano I got Montclair you go get like you know Izod or something I saw it actually I got eyes on too you
have to just uh I got Uniqlo we got Gap Kids for Jay cow it sucks you didn't you didn't declare your Moncler gift package that was the discovery we made this weekend so I want to thank I want to thank the folks that there's a company called and they sent me this uh gift actually this hoodie this Montclair hoodie which I never said what is this plug
they send you a hoodie for 1200 or from Montclair yeah these guys are getting hundreds of thousands of dollars yeah how bad is your portfolio that you're grifting did you put this Montclair stuff onto like eBay after you got it I was already wearing it they sent me more so I'm gonna wear this hoodie is pretty cool what can I say I'm
not gonna work it's three cents and all of a sudden you're grifting uh hey just for everyone listening I'm looking for a wardrobe too soon okay just send my package to my own let me tell you something there's no upgrade that's gonna help Freeburg I think you're [ __ ] no I'm gonna bring you guys Montclair shirts to the poker game tonight gee thanks sax appreciate that
how did how did you guys even find out that he got this gift we're at his Fleet Week party and there was an angel some uh Blue Angels party and there's someone there who started telling me like did you hear the sex cut this whole thing oh somebody there's a rat there was a I'm not telling you there's a rest but he's got to leave he's got a mole we were talking
about the podcast we were talking about 100 100 it was away 100 no no it wasn't what way no 100 was it Jeff I know what are my one of my friends was in the man cave and he saw this like care package from Montclair and he really admired this like jacket it was like a puffer jacket but with like wool sleeves or something so you gave it to him and I
gave it to he liked it so much I'm like I'm like here you take it you're not even on the Pod he's not even on the podcast give it to producer Nick so he was walking around with it he was really appreciative so maybe he said something or well see let's just say there was a lot of conversations going on about your care package socks well and it makes us
Wonder sacks are there other care packages that have come in and like have you been promoting other stuff on here so who makes the captions behind the magazines that you wouldn't want how much of your Laurel piano have you actually paid for over the past year that's 100 here 100 I would never I would never accept it for free
it's important look wait no all joking aside it's hard if you're running a clothing business especially if you're like a small Niche provider stuff so yeah you have a responsibility to pay for this stuff not to grift and get it for free I know when I was at the Laura piano store on 57th Street in Manhattan the 18 000 square foot store I was thinking the
same thing these poor people how do they survive well literally 170 square foot renters Friedberg exploiting poor baby goats well whatever I mean the fact is the Market's down there's gonna be a little grifting on the margins it's understandable [Music] let your winners [Music] we open source it to the fans and they've just gone crazy with them
Freeburg he loves to produce every 17th episode he does a great job oh no I like to prepare or at least know what the heck we're going to talk about when we get together oh God all right so first up on uh freeberg's curiousness this is uh free bird this is how you're gonna do it let's skip ahead to the next section come on no no okay so
um go go go why do you think chamoth people love the podcast why do you think they listen why do you think they love it what is the the phenomenon what what lightning has been captured in this bottle first is I think that they appreciate our friendship it's kind of like odd and quirky and I think a lot of you know it maps to like relationships that they have
amongst their own friends so that's what makes it relatable but the second is that all of us uniquely have a point of view about stuff that matters more and more in the world I think that's just the basics of it like it's not like technology is going away and it's not like its impact in the world is going away and the more it becomes mainstream the more it's
important for a lot of folks to understand what's happening and I think we provide a pretty unfiltered view of it and we do it where and this is a lot of credit to sax more than anyone else on this show to take a Counterpoint and steal man what would otherwise be controversial views and if he didn't have his three friends around him that would make the
Pod meaningfully worse I think can you evacuate for people who don't know what steel Manning is what that means well just it just means like to have intellectual honesty around a point of view and actually put your best foot forward and trying to explain it even when it's not Orthodox even when it's not what the mainstream would say is right
and so what it actually does is it creates a contrast against every other alternative that you have to learn about things which you find incrementally is biased and I think that's what we've gotten right we are four friends that have a reasonable point of view rooted in some amount of success and I think that that's important because it gives
us credibility and we take all sides of issues yeah and oftentimes it is not the obvious simple reductive answer and I think that that's where um it really shines just so people know about the steel man argument you want to make sure people are currently I think most people refer to it as the act of presenting the other argument in the strongest way possible to be
intellectually honest like the opposite exactly obviously because the way the way the debate happens on Twitter and so forth is it's almost like the intellectual debate is uh being attacked uh using opposition research tactics like or a political campaign so in other words they go back through anything you might have said or written take the the
thing that was most wrong or at least justifiable or the thing they can even just take out of context and then they'll try to make it about that as opposed to the argument you're actually making and we just see this tactic over and over again and it's not an intellectually rigorous way of having a debate about something you don't learn
anything right and deep down inside you know that it's contrived and that is the in a nutshell so it has it almost in many ways has less to do with how good we are but frankly how bad all the alternatives are so even if you wanted to learn about tech and you go up and you sign up for these newsletters or if you look at some of these Tech sites they're really terrible
and they have done an increasingly terrible job over the last five years in telling the most important things the truth and everything in between and so if you can find a source for an hour a week that is trying to tell you how basically the world is going to come together in a really integrated multi-faceted way it's not like we're right
and it's not like we know better than other people in fact many times a lot of the criticism I get is how dare you talk about X or how dare you talk about why because it makes people who are experts in that field you know feel like how dare you come into my realm and even have an opinion on you know uh what Russian politics was like in the 1980s
and those things really annoy these folks because they feel that those opinions and that knowledge should be cordoned off and held tightly as this secret that only they are allowed to talk about into the world and this is the point where with the internet all this knowledge is accessible so the value of that knowledge in my opinion is the least it's ever been it's the
interpretation that's valuable and it's the ability to actually like think narratively around how all these things connect and this is where I give a lot of credit I think you guys do an incredible job I think the way fried Brooke thinks is super unique I think the way that saxis thinks is unique I think jaycal your courage to basically
fight back is very special all of it together is a really unique recipe it works and what I will tell you consistently is the number of people that listen to this of import and influence I am constantly shocked and if you are not sure of it you need to get out of this stupid little Echo chamber of Silicon Valley go to New York go around the world and if
you're in the right meetings it's incredible how folks are getting educated using this pod and I think that's that's really amazing yeah I think I I think there's like been a tendency in like what we call Media today historically kind of you know communication amongst humans it was very slow for a communication cycle to go from beginning to end to close because
we had print and books and then telegraphs and telephones and then television and then and radio and the internet I think has really changed the cycle um the loop cycle to the point that you know a story iterates and proliferates very quickly a lot of people talk about the new cycle being very short nowadays and what that means is that there is a
group think approach to resolving to a point of view on what the news is so the news comes out everyone iterates on it they form their point of view and all of a sudden everyone's on the same point of view and so there is no room for Dissent or debate or discussion because the cycle closes so quickly and everyone coalesces around the same point of view
and nowadays I think we see not just that unipolar behavior but we see this bipolar Behavior where everyone coalesces on their point of view and how their point of view is is the opposite of the other side and everyone has their own heuristic for what the other side is there's this populism versus elitism sighting there's this red versus blue sighting
there's this Us Versus Them citing US versus China citing everything is now bipolar and so you very quickly coalesce around what your poll says and what your poll is instructing you to believe and that is what is fundamentally wrong with how the system is working today and I think what people find refreshing about a discourse that doesn't succumb to that
bipolarity as a standard is that it provides people the ability to have a real rational out of sync point of view that maybe changes one's point of view and changes one's mind in a meaningful way and I think that's what's really missing today and I think maybe sometimes we do a good job and we touch on that and so that's what I would strive to do
is to always try and avoid that bipolarity on everything you know the um Zen Buddhists call it dualistic thinking you know the human brain and generally the universe seems to evolve into this kind of dualism on everything and it's not really always the case that there are Shades of Gray that there um is Nuance uh that there is a complex uh
dimensionality to things that I think people really if they take the time to understand recognize that maybe it's not left and right maybe it's not Elite and populism maybe it's not all black and white and that's an important hopefully framing that maybe we can bring bring to light through our diagnosis of what's going on in things
right now yeah and I I'd like to add to that I think there's there's a ton of great journalism going out there we see it um there's a ton of great sub Stacks out there people go deep there's other great podcasts out there and right now it's a tumultuous time for media journalism and and getting information and do what trust what sources do we
actually trust who actually is thinking in a crisp way um and informing people and you know having been a former journalist when we were journalists we knew that we would get 10 20 30 40 of a story we would publish it and we would try our best uh but journalism has changed dramatically in the last 20 years and I can tell you journalism is dead sorry okay I'm sorry
there's some great journalism occurring it's on the margins it's irrelevant and I'll tell you why because the facts are known instantaneously on Twitter and through the internet we don't need people to relay facts we need people to wrap facts in context and allow us to come to our own conclusions that's why I think journalism isn't what it used to
be that's why people who are historically journalists struggle because now they actually have to create context and narrative and have an opinion but when you publish that into the Wall Street Journal or the New York Times it becomes very confusing they don't know that that's what they were supposed to do that's not what they used to do that's not how Pulitzer prizes
were were historically given out and that's why everybody then you know Rants and rails about things kind of going is you know if you if you look at it as journalists people don't know this but journalists are being compensated they're little salaries in many cases are based on their follower accounts they're based on what audience they're
bringing to the table and you see this in sub stack sub Stacks just said we're going to hire the top journalists on who have the most followers on Twitter but you have to change the word so that you change how people think about it these people are not journalists these people are opinion makers okay in some cases they're doing journalism in some cases no no there are
some cases where they're actually doing real journalism there are people doing investigative reporting still it's not the majority of what you see but it still exists it's just a very much smaller percentage but putting that aside if you think about but you can't wrap a virtuous blanket around every a thousand people because of the acts of
one I'm not and I'm not I said there's a range here it's a small percentage but this is what do you think that percentage of content creation I put it at five percent so that's you know one out of 20. yeah shocked yeah anyway I think it's less than one percent but let me just finish this one thought here you know if you are going to be hired and
compensated and we we talk about systems here a lot so just thinking from first principles if you're a journalist if you're a writer opinion writer whatever you produce content for Wall Street Journal for podcasts Etc today let this sink in your follower account is what your book Advance is it's what your compensation is it's who
hires you now if that's the truth and it's it's not all the time but I think that your job is not to relay facts we can get facts exactly let me finish my thought here and so then what happens is how is follower account on Twitter actually derived how do you get that follower count by being tribal and so what's happened is journalists that
became tribal they get big followings they give spicy takes they pick a side and then their compensation follows it and that's why New York Times said can we all stop on Twitter and they literally put an edict out then you look at this podcast I think people look at us as you know in their mixture podcasting long form taking the time week after week to spend 90 minutes
chopping these things up I think that's what to the original question Freeburg you had is what people find so great I I when people ask me I say it's really about the fact that there's a there's a friendships here and it's funny but it's also informative and it it's insightful and at times as you're pointing out your mouth you know random acts of bravery
and taking positions that are not popular and and to think that you and Friedberg almost blew this up over a few hundredk I didn't oh yeah no the two of you equally should share I wouldn't classify it that way by the way here we go now the bad feelings are ready getting spicy I'm more of an ethical framework but yeah that's mine go ahead that's even
worse look at Jim Bob stirring the pot just to chime in on this point I mean I think I'm in violent agreement with you guys but I'd frame it a little differently I think the reason why people seek out our podcasts and other podcasts and sub Stacks is and and sort of this kind of independent journalism and are willing to pay for it is because the mainstream
media has become totally devoid of substance it's as partisan and idiol and ideologized as it's ever been reporters are extremely ideological you look at the New York Times The Washington Post the your major television networks it's all kind of the same thing and yeah there is like you know a little bit of an echo chamber problem in terms of the partisan
politics but the mainstream media is the most ideologized it's ever been I mean just to give you one small example that we talked about in the pod the you know we had two quarters of negative GDP growth which the media is always considered to be the definition of recession and then all of a sudden they said no we can't know what a recession is anymore because they know
that'd be a horrible headline for Biden right before the midterm elections that's more of a partisan version I think on the you know a more ideological version would be just around this Ukraine war I mean it's just incredible how biased the coverage is they don't even present the other side of the story like it's called the meershimer take
about how we got to this point that we're in so the American people just aren't being informed at all I you know we we love to talk about how the people of all these other countries are being propagandized by their governments we never talk about how propagandized the American people are the media does not present the other side of the story at
all on how we got into the Ukraine war and how we're now at the brink of what Biden calls Armageddon that we see you know effectively short formed and short form meaning it can be presented in a sound bike or on a tick tock clip or in a couple paragraphs where someone's attention span before someone's attention span lapses out always misses the dimensionality that
got us to that point and so there's one perspective one point of view on one dimension and the dimension like tax is talking about about the time and the history of the Dynamics of all the countries and all the people and all the interactions that have happened for the past couple of decades that led up to this moment but then this moment is
taken in its context alone and reclassified as being something that is good versus evil it completely misses the entire storyline of what happened it's like going to be end of a fairy tale and saying here's this moment of what happened and all the build up and all the things that occurred are often missing and all the different sides of
the story are missing and I think that that's really what makes it so difficult today to feel like you can trust Authority and that you can trust the the media that's presented to you as a consumer not just in the US or in the west but around the world because there's so much that's left out and manipulated and kept away and what people are waking up to is the fact as
kamath points out that so much of that information the direct information is available now and so this investigation this ability to uncover the data and the story lines and the perspectives that are typically missing from one form of media is making people realize that there's so much that's being left out the lie about this 100 100 and I think
in this podcast that's what's really shocking to people nowadays and I think that's what makes maybe to some degree hold our conversations a little more appealing I'll I'll drop to you in a second there sex but I did see this happen in three specific topics that we discussed here uh if you remember we talked about abortion and we were on
that topic very early and no one wanted to talk I remember when we started talking about the number of weeks maybe how Europe looks at this that wasn't part of the popular conversation it was always just are you against Choice are you for killing babies it was like a very two-dimensional look at it immigration same thing nobody would talk about the numbers nobody talked about
recruitment nobody talked about the point systems used in other countries it was almost like those basic things were not allowed to be discussed why can't the media discuss those nuances and freedom of speech is I think the biggest one and the search for truth you know nobody wants to talk about the fact that the ACLU used to actually protect
unpopular speech and unpopular speeches you know the hardest thing in the world to protect but how did that become something we can't even talk about now right and and just the snap uh silencing of any opinion whether it's Chappelle or you know pick a topic in freedom of speech Trump Etc you know who gets protection for freedom of speech and
we'll talk about it later on the news with Alex Jones obviously a very uh controversial topic as well go ahead sax do you want to add something to it well I think just to take this Ukraine situation as an example I think the media's biggest power is the power to Define when time begins on an issue well like right with Ukraine we're part of an
escalatory spiral that's been going on for well more more than eight or nine months this issue's been going on since 2000 decade yeah for a decade so in other words if you come in in like the seventh inning okay so it's a free Works point you come in at the end of the story and it's been an escalatory spiral but the media just pretends like time
begins on February 24th of course you're gonna have a certain kind of view on the subject whereas if you know the history of the situation if you know that back in the 1990s you had people like George Kennan who was the architect of our Cold War containment policy you had uh William J Perry was Bill Clinton's defense secretary you had Henry
Kissinger you had John meersheimer all warn that bringing NATO right up to Russia's front porch was extremely provocative to them that they would see that as a provocation it would eventually lead to a moment of crisis when that moment of Crisis finally came you know we're not told that this was predicted we're told that anyone who says that this war has anything to do
with NATO expansion is basically a Putin apologist and is spouting Putin talking points all right let's not let's not let's save some of that for the Ukraine talk we're going to talk about it you could agree or disagree with that take but the point is the media doesn't even portray it they really just pick a side and they I think I like your analogy of like just
coming in for the last 15 minutes of the game and just describing that you know we you need to have a deeper discussion of how did we get here how did we get here on immigration why don't we have a point system why do we look at people suddenly coming from South of the Border differently than we did just 20 years ago how did that become a politicized
issue what's the right solution here especially if we can't hire people for basic jobs in the United States everybody wants to know this question what's your favorite you have a favorite moment or a least favorite moment a a great moment in the show history and then I guess we'll move on maybe to some audience questions here but let's let's
get this one because an embarrassing moment your favorite moment your least favorite moment a moment now you look back on and you you're particularly proud of tomorrow I love the cold opens I I think that they are uh unbelievably human and funny and normalizing they are by far the best part of the pod and yeah that's my that's my absolute
favorite part by by like miles and miles uh it's actually got a favorite moment other than Ukraine other than Ukraine I know you got Ukraine on the brain probably you when you started talking like Joe Pesci the Joe Pesci voice do it on command I'm [ __ ] a [ __ ] bad idiot uh no seriously you have any other favorite moments um or things you're particularly proud
of things that people tell you you know hey I love what do you I love this part of the show I'm also proud that we we were able to air our Dirty Laundry a little bit in public and still get over ourselves and our own Egos and we're still here I think that takes a lot of courage and a little bit of a little bit of maturity that's that's not
in uh public visibility all the time in the media I like that sentiment a lot I think there's a lot of people yeah they were uncomfortable about it you know I I think there's a lot of personal growth that's going on here uh for everybody involved yeah a Freebird you got a favorite moment other you know I don't like it when you and sex fight that's just that's your
least favorite moment I literally turned I turned my headphones off and I like do some emailing it really is just it really is just this political thing but yeah it does come up you know I don't like the fact all the moments I've been interrupted by you that like that just happened five seconds ago like you know those are usually pretty tough go ahead
I don't know what I what I did enjoy I did enjoy meeting people at the summit who shared that this has been like a really important thing for them to listen to I I think I I was at a Pete's Coffee in the city and some guy came up to me this was when early after uh early when we were doing the podcast and he was like listening to you guys
has really helped me get through covid and he was like locked in his apartment and he didn't have a lot of friends and he didn't have a lot of people to talk with and just being able to hear through you know kind of a good conversation around when's this going to end how's covid gonna you know what's going to change in the city and hearing our friendship really
made a big difference for him and it was actually really interesting that was off the show but it made me realize that this show actually is impactful and helpful and made gave me kind of the energy to keep going even though I've had uh frustrations um in the past so I don't know I like I like those moments a lot to be honest that there's real value here for people
I also I thought the summit was a lot of fun I mean I had a good time well you know it's uh I I think we're steering towards I think we're staring towards Summit 2023. that was me starting the pot a little bit George 20 I'm done listen as far as I'm concerned you do it you produce it or you hire a producer I'll show you I'm if you I don't need to make a
producer fit you can do it you can take the producer free whatever it is all right guys I got a couple of questions here from the audience you guys uh see this list yeah we can stand out for you guys well you pick you pick so here's a question um we got it over email from Nathan and Nathan said we know the reasons uh the reason you guys started
the Pod what is the motivation of each bestie to continue doing it every week and I asked myself that every week that sex is therapy hey it was that was Derpy yesterday I was thinking about taking a break not because I don't like doing it but it is time consuming and I do want time to get back to doing some business writing I was on a pretty good
track to publish a book about SAS before he started doing the Pod I had written a lot of business blogs and this is kind of taking a break how many weeks because wait 10 weeks what are you thinking maybe like a month or something yeah oh four weeks ah wait you can take that's not a big piece maybe I don't know 40 times all right there's there's a I've
got like a right now it's like doing jumping jacks in his backyard put me in the game well we could do that I mean I've got like five half written business blogs in my Hopper that I really want to finish and um so I don't know the show does take a lot of cognitive energy is what you're saying it takes a lot of those things a lot of your time each
week sex I mean as you guys know the taping is only a couple hours but then it's just keeping track of all the issues and then you know if I'm preparing takes for this pod I also turn some of those takes into articles this is foreign because he is the most heterodox is the heaviest and this is like poorly understood it's easy to just basically
be on the side of the current conventional wisdom or to not have an opinion and to talk about things that are orthogonal but David is consistently the one that Wades into the middle of the ocean and it is it I can I can understand why no because he he knows and that he has to be more prepared than the rest of us yes because he is more open to the attacks from all of these
nitwits he just did I mean on Twitter I'm being told these are like uninformed nitwits you know they're they're the cancer the cancer of people who comment on Twitter is the following they suffer from the worst kind of cancer which is a lack of belief in themselves and so what they do is they point to other people and try to convince yet more people to not believe
in them but that has nothing to do with anything it's just misdirection from their core problem which is they don't believe in themselves and so you know David has to fight all of that stuff off but he has to fight it off with logic which must be exhausting you know my Approach has just been to turn off comments and to not start this is the
single biggest problem I think with social media is it's at this heightened point where it's this virulent strain of a lack of belief in oneself that manifests in this hatred that you direct to anybody else that believes in themselves interesting interesting Theory yeah and I would just just to add to that you know it's not like I haven't heard
any of the arguments that they're making no I guarantee you they have not heard the arguments I'm making but but I've heard all the arguments are made 100 I'm totally familiar with 1938 Munich Neville Chamberlain all this kind of stuff I just don't think that is the correct understanding of what's happening right now I think the correct
historical analogy is either 1914 with World War One and the blank check guarantee or is 1962 the Cuban Missile Crisis the people on the other side generally don't understand that they are just kind of part of this like Twitter mob who's buying into the current thing and whatever they're told by the media so it it is it is a little bit
exhausting I think that that's what people don't realize is you know you when this thing got very popular the two or three days after an episode comes out becomes your text your email your DMs and your replies become filled especially again I would I would encourage you to keep doing this thing and just to turn off comments and don't look back yeah it's hard for the first
few weeks and then you realize 99 of people who comment have nothing important or useful or interesting to say like zero like negative zero and you forget that there's like 99.99 of the world that just reads your content and couldn't even care about their comments but it would still be time consuming I there is a bunch of business blogs I want to get done so I mean I said you
take two weeks off you come back and see how you feel I mean you can do it week by week too I mean just take one week off and see it I think you'll I think he'll come back he'll be back of course he'll be back great great question from Nathan thank you for your participation that's Nathan um next question I actually like this one I'm gonna pull it
out it's an email question from Juan T oh hey wanted uh wanted uh Bill Gurley recently put out a piece explaining how this might be as good a time as in a decade to build a company how are you guys seeing your own portfolio companies trying to take advantage of the situation and I guess I'll add do you guys agree and how do you think about
this as a moment for company building okay I could take that one I am seeing a lot of the companies that were you know had done a great job racing around seed round series a never got product Market fit now wrap it up right they're they're shutting down they're doing the wind down process and then we're seeing lists of very talented people and I've
talked about this before on the show The consolidation of talent behind the winning ideas the the the experiments that actually worked products that got some traction are now having an easier time hiring talent and so to Bill's point he's got a lot more experience in this than the four of us put together is absolutely right when you build in this
down Market yeah it's harder to raise money of course but Talent is what makes great products and products that Delight customers get the flywheel going and if you survive through this and you have that Talent you're not going to face 20 copycats and there's not 50 new products coming out a day people have more time to actually engage and try a product
which they've been burnt out on and the peanut butter spreading you know we have this thin layer of peanut butter Talent now it's getting Consolidated in the winter so absolutely a great time for five CEOs with and Founders or you know 10 Founders across five companies to consolidate down to two do those tuck-in Acquisitions and get focused and build
really good teams and cut the weakest people on the teams there's a lot of weak talent that have been overpaid and aren't actually contributing to these teams and they need to get cut and then you pull in the All-Stars it's a fantastic time he's 100 right all of the if you look back in history since 2000 all of the best performing
funds of all times were the ones that were formed right in the middle of the downturns 030809 these are the vintages that have always been the best and what that means it's a proxy for investing which is it's the hardest time right now it's when you have the shakiest hand when you're writing the check but it'll probably be
where all of the real money is made or the real generational wealth both for the entrepreneurs who have the courage to start and the investors who have the courage to invest there was a story that I heard in New York I was talking to a really well-known hedge fund or family office and they were talking about how they were meeting with a CEO of a fintech
unicorn very well known fintech unicorn and they said they left the meeting and they said this person had an unbelievable disrespect for money and it was the most arrogant interaction that they had ever heard and they said under no circumstances would we invest in this guy in this company at any price and you know lo and behold a year later
that company is now visibly going through a bunch of hiccups and it just reminds me that Jason we've always had two problems when times are good problem number one is that there's never been a check and balance on that kind of behavior a lack of respect for Capital and uh and a almost a disregard for business models which is just inexcusable and I think it's partly the
fault of a very young entrepreneur but it's also partly the fault of a board who doesn't know how to direct that person enablement is real yeah but then the second the second thing is we've always had this you know this big Tech put on the table where every time you would try to really hone in on running a lean highly efficient organization
the alternative would be to go work at you know Google Facebook Apple Amazon Microsoft where the terms were just completely different to what the experience was you know at a startup and the bigger the Gap the harder it was for you to be able to hire and retain good people without just copying them and now that that's also coming off the table that is a key
moment so Gurley is a hundred percent right there is no longer the big Tech put those are the generals that are about to get shot over the next eight to twelve months in my opinion in the public markets in terms of market cap and employment and perks and then second is that these really thoughtful investors who felt pretty deeply disrespected will now be able to call
the shots and these Founders will have to come back hat in hand and either apologize or just completely find a different religion and I think in that you'll have a lot of amazing opportunities to build companies I think it's well said tax what are you seeing yeah I think that's right I mean look when times are as frothy as they were a
lot of bad ideas get funded and there's a lot of bad behavior that occurs I don't think all of it's intentional some of it is just the lack of discipline that when capitalist is so freely available people are building their businesses in ways that we're optimizing solely for one variable which was Top Line growth they just weren't paying
enough attention to gross margins or burn and when you then have a downturn in capital is not so available you have to build your business in a much more Capital efficient way and you can't create fake businesses where you're buying growth that's not economically Justified you know where you've got negative unique economics around the growth so I think that this downturn is
going to create a ShakeOut it's going to weed out bad ideas bad practices and and a lack of support Focus bad boards and yeah one-trick ponies you know there's just a lot of one-trick ponies out there who've optimized growth but don't have a real business and it's going to require it's going to require entrepreneurs to to play sort of more like multi-variable
calculus or math not just single variable it is extremely difficult to convert TDPI to DPI you know the value of paper values into actual distributions and that takes a skilled hand and I think that a lot of young folks were hired into Venture that fundamentally did not know what they were doing they've neither ever built a company or
helped build a company or actually learned how to generate returns but they became very good at buying you know free call options on companies you know I remember like a lot of people the way that you these young people I remember I heard a story that you would sell against Gurley right so let's just say you were trying to do a deal and Bill
gives you a a term sheet from Benchmark and you get you know somebody else the Young Folks are like oh Bill's too negative and he doesn't get it and they would try to convince these entrepreneurs that you know these rainy days don't happen my experience with Gurley is he is the most sophisticated investor of Our Generation and what I mean by that is you know he
was trained as an equity analyst that really understood business models and cost of capital and so in A Moment Like This the way that Gurley would help you on a board is meaningfully more important than how some you know middling VP at some Randall startup who's now a you know a junior partner at a venture firm because that person has literally no
clue and so these companies are going to go through a very difficult moment which again is the reason why a good Steady Hand who knows what they're doing will make a ton of money in this next cycle and for people who don't know tvpi let me just give you a quick definition this is the total value divided by the paid in capital so total
value is distributions like hey here's your Robinhood stock here's your Uber stock here's Cash Plus the net asset value what's that fancy word for the value of the uh shares of the companies that haven't had an exit and so you divide those two numbers you get a ratio 1.5 1.2 Etc but to schmatt's point net asset value is debatable in some of
these right and distributions are what matter you can't you can't eat the uh the irr you got it you got to eat the stuff that's been distributed yeah all right let's keep going I've I'll do one more I'm going to skip over well I'll just the the question on Twitter that got the most votes was what's the exact net worth of each bestie uh I would make the case that
that's probably not the best way to measure oneself and you know I don't think we're gonna do it I also would argue that we're probably all exposed to a lot of Fuzzy Math With Private assets that we own and in terms of companies who cares like how does that correlate with happiness in life it doesn't right so it doesn't really stupid question and I don't think it's a
big focus in terms of objectives I'll say the next uh one that got a lot of votes which I really like it's a lagging indicator and a byproduct of what we do there are moments when what we do reflects in value that frankly where we are over earning and then there are periods where what we do is under reflected and we are under earning
and so the through line has to be that you need to survive in both good times and bad times which means you got to like what you're doing and if you get caught up in a numerical number there's all kinds of math you can do to make it look a lot bigger than it is but it's all meaningless yeah I would argue you're as long as you're actively developing yourself over time the
weighing machine will do its job somebody told me in my 20s when I was at AOL he said you know if you're because at the time I you know I grew up on welfare I thought the goal was to make money I didn't know any better I've learned later that there's a lot more leading indicators of happiness and things that actually cashier create happiness why truffles
white truffles um I was gonna say friendship my family but yeah friendship and family laughs I Define it as laughs and friendships you know friendships but uh but but he said to me you know your goal should be to just be in the upper few percent of your age bracket and just enjoy what you're doing and he said let time take care of everything
else because as long as you find something you're you know you decently enjoy and are good at you'll just get better and better at that thing and then at some point you know you will lose track of what the you know measurement of that is because you're just too caught up in in how much you enjoy doing the thing and I thought that he had no idea what
he was talking about and now 25 years later I can tell you he was totally right totally right yeah by the way this this was a question I was trying to skip over so no but it led to a good Fork yeah okay what is happiness yeah yeah I think after you know observing outcomes for 25 years in Tech what I would say is that if you're a smart hard-working don't have
behaviors that sabotage yourself and you know take intelligent risks you will be successful in this business I mean technology is such a wind at your backs it's such an engine of wealth creation how can you not do well but the exact magnitude of how well you do I think is ultimately it is substantially affected by timing and you know like if you were
employee whatever number X at Google you're going to do better than most Founders even of the Unicorn company and when you found your company and then when you exit what the market is doing those things have a huge impact on the ACT on the magnitude so you know whether you end up being you know a billionaire or a centimillionaire you know a Deca
million or whatever you want those things are very affected by timing and chance but not whether you're going to be successful at a substantial level and so it just you know be smart be hard working don't sabotage yourself you know get into Tech and you will do well trust the exact amount of how well you do will be dependent on some
you know stochastic factors but not the fact that you're going to do well we are enormous beneficiaries of having been born when we were because we are a bunch of late 40 and early 50-somethings that in the prime of our career in Tech um the Federal Reserve took rates to zero and we had no idea a priori how important that would be in all of our
outcomes but they were and even more importantly PCS Internet and mobile happens all of that hard work was done beforehand by an entire court of people that had to fight much stronger headwinds than we had to fight so you know David I just want to build on that like we were extraordinarily lucky and so don't get caught up in that because
there's all these factors you don't you cannot control I'll say one more thing that I think is the most important observation I've made in terms of whatever it is Building Wealth over time is to make sure you're building equity uh in yourself if you're in a Services business and every day and whether that's serving the clients of the company you work for or just serving
clients on behalf of yourself and everything you do is a transaction and that transaction doesn't build on itself doesn't compound value in some way then you're missing out on an opportunity every year that goes by that you're earning income where you're not building Equity uh is is a non-compounding year and it's compounding Equity value that I
think ultimately pays off for you as an individual and I can give a lot of examples of this but if you're in a let's say a brokerage business and you just do deals and you might make have a good year you might have a bad year the real question you need to ask yourself is what is compounding are you growing a client base are you growing your skill set are you next year able to
do more things or have more options than you had this year and if the number of options you have is declining or static every year then you're limiting your Equity value and that ultimately will translate into limited wealth creation can I chime in on that point around Equity so yeah when I discovered what Equity was this was when I was in law
school and actually the guy who explained to me was Antonio gracias a light bulb really went off for me because my dad is a doctor and I was on a path to becoming a lawyer and in both those cases you're a professional the way you get paid is you more or less charge an hourly rate and so the amount of money you can make is capped right
just take the number of hours in the day and in the week multiple apply it by your rate and that's the most money you can make in a year and the difference between that and Equity is with Equity you own a piece of a business and that business could be ultimately worth you know any amount and so your Equity could therefore be worth virtually any amount
and so you're uncapped and so just you know if you want to have outside success you have to have equity in something I think that is exactly right if you're just basically working for wages you even if you are the best at what you do and you get paid an insane hourly rate you again you can be successful but you're not going to be uncapped and so that is the beauty that's the
beauty of Silicon Valley is all these companies offer Equity to everybody and it's not just shares in something you can actually get equity and create leverage in your life in this era more than any human has ever had in any era prior because of software and Computing and automation you can create a website that prints cash for you every day if
you wanted to you can create a service that you get leverage out of and there's Equity value in that and I think that's really key because then you can go build another one another one and you're building value over time and that's just the most simplistic example of how technology today provides leverage that can really allow anyone to
pursue a path of equity and and I think you make a good point about what what are you getting leverage off of yeah so there's there's a bunch of different things so the old way was leverage off labor and I guess if you were to own like a consulting firm or like some sort of factory then the more people you have working the more money you'd make the
other way would be like you can get leverage off Capital like a fund manager or you can get leverage off of Technology because software can basically create these super scaled outcomes so you need to figure out like what is it you're getting leverage off of yeah I'll go so I'll do the last one which I thought was a really good question and I got a lot of votes from
Marcos Ortiz if you had to start from scratch no money no connections only the knowledge you have right now and 100 bucks what would you build in 2022 I would build something in energy transition or in life sciences with a hundred dollars yeah I would build a startup incubator Venture fund of some type a way to fund entrepreneurs and just be
a capital allocator much earlier in my career I would create a B2B software company that actually I'm already creating it so I haven't unveiled it yet but there's something I'm incubating right now let's go David go whoa where's the bad week wait whoa whoa wait what your beak what is going on here I haven't gotten the subscription I've not raised money yet my
subscription documents sir you can think of this idea as Yammer 2.0 so Jake how you're not in because you criticize the Amber but it was a joke I gave of you though I let you win TechCrunch fifth yeah I put the [ __ ] fixing for you David just to put my pitch in I ran Eamon icq helped Facebook was an investor in Yammer was the for series a
investor in slack so I'm ready for you yeah I'm right here you were there for us when we needed you back at Yammer days unlike J Cal what are you talking about your meme let me in let me leave it one million round round thank you did you just agree on TV yes well assuming hold on there's one thing you have to do which is you've got to
rip out slack and use this instead yes 100 100 I will do that just so you know Community well I'm gonna be very honest with you the day I left Facebook I stopped using it the day we sold we distributed slack stopped using it so don't worry about me I am right I am 100 alive with you I'm all in I'm all in absolutely all right let's do the show let's do the show
Freebird you didn't answer that question what would you do well actually I would get some water vaporizers and then I would get some molecule and I would make a new super protein that was made out of good sorry let's keep going I like it I think it would be something with the protein slurry you'd make some kind of steak that takes better mistakes
it's some type of protein I would definitely build a business again I think the you know the challenge is uh As you move past that stage in your career where you know you have the willingness and the time to be a hundred and twenty percent building one product every day uh it's it's really hard to go back to that and I think if I was in a position
again where I had no money and had no I think that's the key part of the question not the hundred dollar part yeah I think I would go back to building something I do think the intersection of Life Sciences with software creates this era of opportunity it would probably be something in the realm of AIML meets Life Sciences where you can actually work in a leveraged way
with software to drive outcomes in these important markets so I would actually create right yeah we could have started something yeah maybe we can still oh okay the co-founders sax will let you in the pre-round if you let us in your pre-round okay sounds good okay all right Kelly you want to take us forward should we go forward okay let's see
what's on the docket we've got Russia's invasion of Ukraine you had Biden last week saying we're facing the risk of Armageddon how is that not the top story go taxi poop go take it all right here we go let me just queue it up for uh sax fine last week so we're facing risk Armageddon that's your tia okay we go and then Leon Panetta just let's teed up
Jayco we don't need everyone knows what's going on Leon Panetta just who was the former Secretary of Defense and director of Central Intelligence wrote an op-ed for Politico saying that intelligence analysts have now raised the probability of a use of a technical nuclear weapon in Ukraine from one to five percent at the beginning of
the war to 20 to 25 percent now is what he says so and I don't think he'd be saying that if this wasn't pretty much conventional wisdom in Washington now I mean Panetta is sort of an uh very respectable figure in in the Beltway so you might have said it right for the first time said that we're facing the most dangerous situation and the highest risk of
nuclear war since the Cuban Missile Crisis he called the risk of Armageddon the problem is that nobody is willing to say what we should be doing differently to avoid this situation so you know people are always attacking us or having a point of view on foreign policy first of all this affects us I don't know why we're not allowed to have a point of
view but you know in in our business thinking where there is an existential issue you have the attitude of drop everything and figure this out if somebody told you that there's a 25 chance of your company blowing up maybe in the next few weeks you would drop everything and focus on that problem but it's like you know after the Armageddon
comments it's like the media just passed over it it's like oh this is like crazy Biden or whatever it was minimized it was textualized the White House walked it back nobody's really focusing on this and what we should be doing differently and in fact what Panetta recommends and Petraeus said the same thing is that if Russia uses attack nuke in Ukraine then
we should respond by attacking Russia directly now if we do that we are literally in World War III and remember at the beginning of the war Biden was really clear that we weren't going to get directly involved he vetoed the idea correctly of of the no-fly zone which would have required us to shoot down Russian planes Biden remember he was asked in the press conference at the
beginning of the war by Lester Holt he said Holt said you know Mr President what if Americans are trapped Behind Enemy Lines in Ukraine would you send in American troops to go get them buy and said no I think very properly said no because he said listen we do not want to risk War III but now because of mission creep and the slippery slope and we've
all gotten more involved in this war we've gotten more emotionally committed you now have Panetta and Petraeus calling for us to directly attack Russia and get in World War III the Russians almost certainly would respond with nuclear because that's all they've got they don't have the conventional forces to stand up to us so look at how close
we have now gotten to the brink of a nuclear Showdown and has anybody reassessed is any anyone calling for us to reevaluate because that's the conversation we should be having right now and free break this brings up two points that I think you you can comment on Naval uh actually the founder of angelist angel investor and uh just public thinker I would say
public intellectual he came on to call him with the two of you and he you know outlined like who does get to have an opinion on Ukraine and other issues which has dovetail with this like who gets to be an expert in the world today and of course at the same time not only Sachs has been commenting on hey what's the off ramp
here Elon has been talking about hey you know how do we get out of this do we have some votes uh you know by these uh regions that have been annexed or that are in dispute AOC now is getting criticized under for people shouting her down at a public event today or yesterday that she's a war monger and she won't speak out against War how do you frame the public
dialogue about this Freeburg and then do you see a potential off-ramp here other than Putin leaves Russia which is I think the public stance uh by a lot of folks you know Putin can end this he just has to leave Ukraine in order for this to end so two questions there for you free bird it's very hard to have good dialogue about any situation
where an argument could be made on the grounds of morality in an absolute sense making it really difficult to have a discourse around what the right thing to do is because you don't agree fundamentally on the objective you're shooting for one side says the objective is to preserve the Integrity of democracy and the freedom of people and the other side says the objective
should be to secure the interests of the West and the United States and preserve the world from nuclear Holocaust I think that's what makes this a challenging conversation the objective can be reframed and then from that objective each side can make their own case without being forced to take in the point of view of the other side and it's why we're at a bit of a
standstill and it's also why it's so easy to get swept up in a mass point of view a coalesce point of view of the masses that makes one feel good about what may end up being a very bad situation it feels good to say I'm doing this for freedom of the people I'm doing this to save lives and the end of the day it may cause a nuclear war
and it's okay because I feel good going into this debate that this is the right thing it's the morally Superior thing to do what's very hard is that we can't actually say as a group our objective should be to preserve the Integrity of democracies around the world to an extent and that's a nuanced point of view to an extent means I'm willing to
preserve the democracies through certain actions but I'm not willing to cross a certain line and absolutism doesn't need to come into play that's what I think is making this such a very difficult conversation and it's why it's so hard to actually have a conversation around it and it's really I would argue the most poignant and the most dramatic moment in what we talked
about earlier which is this deep-seated kind of you know bipolarity and once you're sitting on your pole you don't want to come off and you don't realize that so much of the dialogue is in this middle and we have to come to some point of view that maybe this isn't about an absolute outcome it's not absolutely going to be nuclear war and it's not
absolutely going to be the end of democracy there's some conversation in the middle that's very difficult to have and people that work somewhere in the world hopefully ambassadors foreign policy people State Department people hopefully are having the more nuanced critical conversation about how do we resolve to the maximal outcome that doesn't necessarily take us
to an absolute end to that point it's going to be an imperfect outcome here I think this is much much simpler than all of this Leon Panetta is a senior counselor to this defense Contracting agency called Beacon Global strategies who works on behalf of Raytheon I found that out while Friedberg was talking in a two-second Google search
I suspect that if you looked for petraeus's conflicts of interest you would find that through some Byzantine set of you know strategic Consulting organizations and whatnot he also works on behalf of the defense industry so you have these people who will generate more revenue and more profit if there is a massive war and those people have been
trying to push us into a land war in Europe since this whole thing started and so this is just yet another attempt it's just the most final way of doing it so I would just encourage people whenever you see all these folks clamoring for war um it's just to keep in mind that they are riddled with conflict and that you can find it out again this information
is sitting in plain sight on the internet and you can figure out whether this person is is really advocating a truth that makes sense or they're getting paid to shill um a revenue generating mechanism for some part of the military industrial sex how much of this is people talking their book their book being the military industrial complex in your mind
I think it's a big part of it I think all these Washington think tanks are funded by defense contractors I think it's short-sighted obviously because if it leads to a nuclear war there's nobody with the defense industry there won't be anything left so but look I think that I think that Washington is wired for war in part because there's a huge Lobby for
it for all these defense contractors and what's the lobby for peace I mean there's no one really arguing for peace speaking of this Elon oh I I'll tell you what I'll tell you what's lobbying for peace and I'm going to connect what may seem two disparate ideas together but the single biggest thing I think that will prevent nuclear war
is the inflation that we're feeling and the reason is because it allows the FED in my opinion for the first time really in the last 15 years to act properly and if they hold the line and they take interest rates to four or five percent I think one non-obvious outcome of all of that is it becomes extremely expensive next to Impossible
to finance military adventurism abroad and that's a practical economic outcrop of really you know meaningfully High rates greater than zero and so I actually think the reality is that for a lot of these governments the more that inflation sticks around the stickier it is the higher rates are in general the bigger the problems at home are and the less prone they're
going to be likely I actually think that explains that explains the escalation of this rhetoric because people want to try to make this issue and put it on the table but you understand that you know these folks don't say it's a 90 likelihood they go from one percent to 25 which if you understand probabilities is effectively a left tail risk that's
effectively the same and the reason they're trying to do it is they're trying to get it back David as you say to time stamp it to get it in front of people's perspectives to make it important in a moment where everybody increasingly not just in the United States but in the UK in Europe are looking internally and trying to figure out how to keep their economies in a
reasonably functioning way and how to make sure that their financial and other infrastructure keeps working so you're saying and that is not necessarily a priority when rates are zero but when rates are four percent I mean just by the way if you guys saw what happened today it was the competing of two narratives this week there was a financial Narrative of the UK having to
bail out their pension system right of all of a sudden the pensions being forced sellers of those four sellers now you know uh spilling into the United States debt markets around Clo's and collateralized Loan obligations and junk debt which then could theoretically spill as a contagion into other parts of the market that was narrative one
and and all of that by the way is a result of hiding inflation and the you know fed moving up rates and you know other countries being forced to to attack inflation with higher rates and creating all these dislocations narrative one versus narrative two which is hey all of a sudden we have to put the nuclear risk on the table and if you
actually saw the print that was spilled the disproportionate amount of the rhetoric actually focused on the former narrative and not the latter and so I think that that's why the these folks are escalating the rhetoric in order to kind of create an equality so that they get enough print they want that version of the outcome what you're saying is you
have the world saying we can't afford to have this conflict we are broke well not too many chaotic issues the world is saying we are increasingly under enormous domestic pressure and as a result we cannot spend on things abroad we can't afford this and then on the other side saying well we need you to afford this so nuclear is going to happen there's going to be a
nuclear and there's a small attention there's a small strain of folks who would economically benefit yeah who are now ratcheting up their rhetoric so that that second path is more and more on the table what do you think of this freeberg this analysis that shamoth has these two polar these two uh groups vying for the attention and or budget of
the world the the military-industrial complex versus yeah uh citizens saying our country can't afford this we need to focus inward not citizens the central banks but I think the central banks influenced by citizens right like there's a whole system here we're talking about people are you know watching their questions away they're watching jobs get cut if I was a
betting man I spent that I I would guess that the next half a trillion to a trillion dollars that is spent in Western world economies will be to subsidize something that's broken internally inside of one of our countries whether it's the UK pension system or whether it's the high-yield credit markets and it will not be the finance
military adventurism in Russia people um so there's an article today in the Washington post about how the U.S government's Debt Service is going to be around 570 billion this year which is a 45 increase Biden's budget for 2023 is only 1.6 trillion so you're talking about something like over a third now of the official budget is already going to
Debt Service because it's not variable right it's a variable right exactly because so much of it is is um it's not locked in long-term rates so because interest rates have gone up so much The Debt Service gone up and interest rates are still going up and so you know druckmiller had those points around how the debt services within a decade is going to eat up practically
the whole federal budget so trimath is right that we've never really had to choose between guns and butter before in the past it was just let's just do both and we'll rack up more national debt I do think there will be more and more pressure to question this type of spending and why we've already given Ukraine 80 billion dollars in handouts
when we can't afford to basically pay for you know major entitlements at home so I think there'll be more pressure now I think I don't know if that pressure is going to come in time though to de-escalate this Ukraine it's more it's not and that's what concerns me and just to just to cut to the chase on this I think where the rubber meets the road on
Ukraine is Crimea it's and why because the Russians have a major Naval Base there at sevastopol it's the home of the Black Sea Fleet and they will never give that up they are willing to use nukes I believe to basically protect that asset it's a vital interest of theirs hold on 80 of the population of Crimea they're Russian and three quarters of them
according to polling that was done by Gallup and by a German polling firm so not Russian polls indicated that they see themselves as Russian and only part of Russia so if we supported self-determination we'd be fine with Crimea being part of Russia but here's the rub Ukrainian nationalism demands that every square inch of Crimea goes back to Ukraine and it is State
Department policy right now that we will never recognize Crimea as being Russian will never recognize the annexation which happened back in 2014. so something's got to give here something's got to give either we have to sit down zielinski and say to him listen you're not getting back from me yet we're going to make that part of a peace deal or we
are going to back the ukrainians in their military effort to retake Crimea with the result that I think is quite likely that the Russians will be willing to use a tactical nuke to prevent their total defeat so at some point we're gonna have to choose here which of these outcomes do you want do you want to basically go for a negotiated settlement
which means telling the ukrainians they cannot have everything they want or do you really want to risk a nuclear war to take back Crimea which is Russian and the people there see themselves as Russian so we need to make a choice here yeah so Elon put out a tweet for and got Savage for it and he outlined sort of what you're saying here so do you think his plan he said redo
elections of annex regions under U.N supervision Russia leaves if that is the will of the people and then he says Crimea formerly part of Russia as it's been since 1783 water supply to Crimea assured as you're saying Ukraine remains neutral should the West Force Ukraine to accept these type of terms essentially elections and I don't know why Crimea
wouldn't be part of that election process do you think U.N supervised elections in those regions should occur and we should force Solinski to do that so he who pays the pipe or calls the tune of course we need to have a point of view on how this war should be resolved should we force him to do that listen it's not about Force they can
fight on and do whatever they want as long as they want hold on with our support American weapons so you think he should do that weapons if he doesn't if zielinski wants our weapons and support which appear to be infinite we should not give him a blank check guarantee the blank check is how is what started World War One the German Kaiser gave Austria a
blank check guarantee and it led to World War one that is how great Powers get pulled into the wars of minor powers and we absolutely have to have a point of view on how we do not get pulled into this and I think our one of our lines should be that we are not going to fund the ukrainians in retaking Crimea got it so just to put a to clear this so we can
move on to the next topic you're in support of removing or not giving further weapon support to the Ukraine unless they negotiate this it's not going to come to that we need to have a point of view on how you are in support of stopping our support if they don't sit down and negotiate a settlement here that's what you would do America needs
to have a point of view of what is in its own interests what is in our interest is for this to get resolved diplomatically at some point through a negotiated settlement not for it to escalate into a nuclear war that we could get pulled into the only way that's going to happen Okay is if Crimea goes back to Russia I'm telling you they
will be willing to pull out all the stops they could even use Tech nukes before Crimea but can you answer the question though that I asked three times would you remove American support and weapons if they don't accept that if Ukraine doesn't accept that would you be comfortable taking away our support in wealth I don't think it's going to come
to that but yes we should be willing to threaten that okay that's it I'm just trying to get you to answer that one question hold on a second they are a client state of the U.S they do not call the shots we're America we call the shots we're the big dog here all right that's the bottom line and you really want to get pulled into a nuclear war
but I do not I just wanted you to answer that one question if they don't let's get real okay it's not about our future you know we're our American nationalist at least I am I'm not a Ukrainian nationalist I support self-rule I think we accomplished something by preventing Kiev from getting toppled but I want to support self-rule for the people of Korea it's
time for a settlement in Saxon I think the most important thing that we can all be thankful for which I think will prevent a lot of wars in the next 10 or 20 years is inflation and non-zero interest rates it's just going to be really tough like you know the UK cannot do anything right now other than make sure that they have foreign currency
reserves to back up the pound which they don't really have that much they're going to need money to bail out their pension system whoever thought it was a good idea to allow pensions to run levered risk was it's obviously insane could you imagine if it turned out that the teacher's pensions and the firefighters pensions in America were running levered long I mean
this has to get resolved now I mean it's just another Breaking Point yeah it's clear you know what a pension is I know yeah it's just no no I'm saying it I I'm saying don't use some fancy intellectual argument I'm saying practically speaking the treasurer is not allowed to call Goldman Sachs and say I'm going to run two turns of Leverage on this money that
is not allowed to happen in the United States okay I get in some fancy way it could be thought of as levered long with you know all kinds of indirection but that is not how the world works today practically speaking it is how the UK Works a treasure in a UK pension system is allowed to call a an investment bank and actually run levered that is insane
okay so my point is when rates are non-zero all of that Jig Is Up governments are forced to batten down the hatches and you know husband cash for God knows what will break in the system and I think that that is and and as disruptive as that is it may actually be the bulwark against War The Jig Is up folks uh I mean I think that's what we should take away from
this is we can't afford this and the United States is funding it we have to force a settlement here and it will be a profile it may be the silver lining of inflation okay Andy jassy's uh had an all hands meeting Amazon is freezing hiring for corporate roles in its retail business almost 90 VPS or higher level execs have left Amazon since 2021
earlier this week there was an all hands presentation and the slides were leaked to Business Insider some of them constraints breed resourcefulness self-sufficiency and Innovation there are no extra points for growing headcount budget size or fixed expense of slide instructed employees to accomplish more with less sounds familiar sounds like something the U.S
needs to do and foreign policy needs to do Amazon leadership team urged employees to double down on frugality chassis also spoke in the meeting just a couple of quotes and then I'll get your thoughts chimoff it's on a lot of people's minds and of course none of us know for sure what's going to happen but there are a lot of signs that point to
this being a difficult and rough economy ahead of us and I don't know how long that'll last but I think it's one of the things that we are thinking about and we've decided that we're going to be more streamlined in how we expand in 2023 good companies that last a long period of time who are thinking about the long term always have
this push and pull trimath what do you read into this I'll say uh three quick things one is that today Thursday October 13th we had an inflation print which was worse than expected and the markets are materially higher right so you know strange why well I you know we talked about this a few weeks ago but you know my thought then and same is it's the same that I
think now is that we've effectively seen the near-term bottom and we're now consolidating and so every opportunity people have to justify that most of the news is behind them they take and they use that as a reason to buy okay so that's number one which is that we are sort of near the end the second however is that if we do see another leg down
there is really only one cohort of company that hasn't been really whacked and I'll summarize it very quickly by saying it's Microsoft Amazon Apple and Google that's it even Facebook has now been sort of put into the bucket of everybody else where you know we've been crushed 60 70 80 in those companies so so so what does that mean well those
four companies are now being identified for what they may be which in capitalism is called over earning okay they are making more money than we think is appropriate this letter from Andy jassy is his way of effectively telling his major shareholders that he is now moving the business to become more of a cash cow business Tim Cook made this
incredible decision in 2016 1718 that effectively did the same thing that's when Buffett came in that's when he established a huge ownership in the stock that's when the stock absolutely ripped because it moved into a different bucket in people's minds it became growth at a pretty reasonable price and I think Andy is making the case that Amazon is going to become one of these
GARP stocks growth at a reasonable price he's going to generate a ton of cash flow he's going to keep expenses nominal he's going to return a ton of cash to shareholders with BuyBacks that's the reading in between the lines of that letter I think it's a really profound statement and a very smart move because you haven't seen that letter or a version of
that letter yet for Microsoft and you started to see hints of that letter from Sundar where he said you know it's it's and he's not he's saber rattling he's not there yet he's in the appetizer part you know he's emus Bouche where he's like oh you know guys you got to work harder hey guys let's create some fancy acronyms but sundar's got courage no no
but he's got courage he is going to rip the Band-Aid off too and so I think what it means is these three and maybe these four companies are going to draw a hard Line in the Sand and say we are not over earning do not abandon this stock that again will help put in the bottom in the stock market what do you think free Burger you worked
at this company and uh you know the the the principals across the board the saber rattling will turn into saber swinging uh in Q4 q1 you think Google Apple Cuts coming Amazon is affected in a different way because they operate this physical supply chain business they're delivering Goods to people's homes that people are buying so they're they're uh they really have to
uh change their trajectory very quickly it was incredible you guys remember when covet hit you tried to place an order on Amazon it was like three weeks to deliver because the infrastructure wasn't there to do it so they actually were seeing more orders than their system had predicted and they did massive build out they hired what a
million people or something uh in their network uh to meet demand and then over the next year uh earnings went through the roof uh their infrastructure and employee head count went through the roof and now we're obviously coming back down the other side of a mountain and they're having to shift uh strategy and and shift their operating model yet
again there's a a broader set and that's because they're in the direct Commerce business Microsoft Google and other kind of software companies some of which benefit from advertising which is almost like a first derivative on the consumer Market or a first derivative on the spending of companies that sell to Consumers have a little bit of a different calculus they're a much
higher margin business 30 ebitda kind of business with ebitda margin business with a very uh distinct kind of set of challenges on how advertising revenue is going to be affected over the next couple of quarters and balancing that against their Cloud platform which is sold to Enterprises and their media consumption platform which is generally
like YouTube at Google's case which is less affected so it's not as much of a direct calculus I will say what's happened over the past decade which we're now seeing change is these companies have had extraordinary growth uh hiring people to no end there's always been you know kind of this extended expense on Capital on human capital and that
expense on human capital has driven the average cost per employee through the roof and it's not just the salaries it's the cost of the rsus it's the cost of the facilities and the free ice cream and the gyms and all the other stuff that's gone on to compete that's now changing and so it really is creating a different model for operating that
hasn't existed for the last decade where everything has been you know how many more things can we throw in the kitchen you know throw like the kitchen sink at this problem to get all the human capital here and I think that's really you know what's what's going to kind of structurally change in the valley it's not as acute as what Amazon is dealing
with it does feel like um that is those are the last cities to falchum off they are the ones they are the ones that take the index to 3200 if we're going to try to do it there's only one place to look you've whacked everybody else everything is down you know 50 to 90 in some cases so and then finally you know and by the way sorry just just at the end of life of
last year a quarter of every s p dollar was crowded in those names a quarter so you got to go there yeah I mean and also they're automatically bought right they're automatically bought by these index funds and and so who's at the wheel saying we're not we're going to take the money out of them right who who in their right mind is taking money out
of apple Amazon and Microsoft where do you put it I guess is everybody's question right trim off like if you take it out of there where do you put it well no I think I think it's just that when when you have patterns of selling typically as I've seen it uh my experience is that initially it's the algorithms that really start to push a market in a
direction then you have you know the more traditional fund complexes that's the hedge funds and the long onlys they follow suit and then the last group tends to be retailed and it works in reverse the other way as well and so you know obviously there's exceptions to all of these but as a general rule so if retail starts bailing on Amazon well they are right now and
apple yeah they are sellers now but okay now time to buy it right but again this is this is where sort of organized Capital now is finding a bottom again like when you start to shake just think about the psychology of like being delivered bad news after bad news you go through the cycles right there's denial there's anger there's depression there's
bargaining but then at some point there's acceptance and in that acceptance phase you're like yeah you're right things are bad but when you see a market rally into a print like this it's uh it's really really interesting psychological Turning Point as a proof point to what you're saying sax uh chamoth and sax I want to
get your comment on this Venture Capital firms like Sequoia Excel and others that have now uh changed their status as you know just private companies but also dabbling in public are buying public equities which basically means they see more opportunity in public underpriced tech stocks growth stocks Etc then they do in late stage private companies correct and
you saw the Wall Street Journal story I'm assuming sex yeah I saw that what is what do you read what you read into that is it overblown or is it indicative of something I think it's probably overblown because Sequoia created that fund that is a hedge fund and an Andreessen Horowitz became a richer investment advisor so they could buy public security so I look I don't think
most Venture funds are all of a sudden investing in public markets we aren't even allowed to do that as far as I know nor will we ever try to so I think probably it's exactly you have to give up socks your VC exception exemption but you could do it you could do it yeah yeah I mean we wouldn't want to but it's kind of the point but look I can't
explain why the market did what it did today it could have liked him I said it could have been some sort of algorithmic you know buying or selling um but I just think that the overall news today was the economic news was just another really bad report I mean just look at these headlines from The New York Times today okay I'm going to read you the headlines on a single sort
of scrolling page here number one inflation came in much faster than expected bad news for the FED takeaways from another painful inflation report three disappointing inflation data keeps Democrats on defense out of midterm elections four food prices climb again Weighing on household budgets five rent inflation remain tepid a troubling sign
six used car prices aren't declining as much as economists of the host slow down get give Freeburg a chance to take some time take his Xanax for you gas prices fall slightly but overall energy costs are soon expected to rise and eight retirees are getting an 8.7 Social Security costs living raise the biggest in decades I guess that one is sort of
positive but it's like literally negative headline efforts in the New York Times but can I reinterpret that for you I think I think the way to think about it is this gives the fed the resolve it needs it's going to go by 75 it's probably going to go another 75. we're going to have rates by four to four fifty to five percent probably
within q1 which means if you're trying to figure out where the bottom is it's roughly now ish and so that's why you see smart money David shaking this thing off um and starting to enter the market and so again and the other version interpretation is when rates are four or five percent the cost of servicing United States debt is so meaningful as a
percentage of their budget the incremental spend that they would need to make to enter a new war is too much I think I love this point I love this point where we're we're weaving all these things together so so right so on the economics page of the New York Times disasters headline after the disasters headline then you turned the foreign policy page you got
Tom Friedman writing a column here saying we are suddenly taking on China and Russia at the same time and Tom Freeman historically has been a huge Hawk and he is even saying he's saying yeah pump on the brakes never fight Russia and China at the same time yeah so he says we are an Uncharted water Waters I just hope these are not our new forever Wars It's Like Whoa so basically
look our economic base our economy is crumbling at home at the same time that we are doing unprecedented saber rattling abroad this does not compute we we need to take a timeout my prediction but my my prediction is that we will not enter a new war with rates flexing up as aggressively as they are I love it I love weaving these two stories together
I think it makes a lot of sense we didn't have time for Alex Jones but we'll save that for another episode gentlemen I think it's our best episode ever it's an honor and a privilege to spend this hour or so with you every week I love you like brothers and it's been a great hundred episodes I look forward to a hundred more sacks if
you need a mental health break Dr friedberg's oh no he's got him doped up David David will be back next Friday I just want to say hey David don't read your replies get off of that I just want to say how much I love you guys and I'm really proud of what we've created and I'm really excited to get to the next hundred and uh I'll see you guys tonight I'll
break out the light so we're all you want to keep going that's the news today I will say that Jake house moderation has been a lot better since he got brigaded that is his way [Applause] I love you I love you Freeburg let's see if we can get sacks to do it it's been 100 episodes he hasn't said it yet but I love David Zacks David's are you coming
tonight taxi before you coming yeah I'll come I'll come you're coming oh wait wait wait wait uh let me check I'll get back to you offline I'll see you tonight Rain Man Davidson I'm going home and I said we open source it to the fans and they've just gone crazy [Music] it's like this like sexual tension that we just need to release somehow we need to get Mercies [Music]