Prof G Markets: Nvidia Earnings are the Super Bowl of Business + Trump’s $5 Million Gold Card
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I always thought anxiety and worry were the same thing. But worry is actually, it's a behavior. It's almost like a self-soothing behavior. And people who are very anxious think that if you just worry enough, you won't be anxious anymore. But instead, worry can make you more anxious. Like, you're never going to get to the end of the worrying. If it's a behavior, why not change it?

This week on The Gray Area, I talk to Olga Hazan about our personalities and whether we can change them. Listen to The Gray Area with me, Sean Elling. New episodes every Monday, available everywhere. Today's number, $49 million. That's how much New York City's congestion pricing tolls brought in during the program's first month. This is an actual true story. Ed, when I first moved to New York, my first date was with a woman named Martha who took me to, no joke, a sex club.

And one of us had sex, and it wasn't me, Ed.

That's a true story. That's not a true story. No, it's a true story. The club was called Trapeze. You're going to have to elaborate. It's the final part that I'm really intrigued in. Met this woman, a really interesting woman, nice. I was very attracted to her. And I had this big deck. I lived at one Greenwich, and I had basically this 700-foot apartment with a 3,000-square-foot deck. See above, single and desperate. And I had this big deck.

And I used to have parties and people and I met this woman, super hot, seemed super cool. Yeah. Asked her out, kept asking her out. And finally, like, I'm getting nothing back here. And she's like, I have something I think you're going to like. And she showed up and said, I'm going to handle everything. And we went to this place and it was a West Village or so, go underground. It's like 300 bucks for the dude and nothing for the woman. I'm like, well, that's going to be interesting. Yeah.

And they give you a towel and she changed into a towel. And anyway, she ended up making out and fooling around with a woman. It's crazy. That was my pick.

New York story. NYU professor, would you let your kid take class with me? Yeah, you didn't do anything wrong. I mean, you shouldn't have pursued this woman specifically, clearly. Oh, I was so excited. I think I still probably text her saying she'll give me another shot at trapeze. What happened in the basement, water under the bridge. Let's start over. Actually, also, my other New York joke is

You know, New York is just full of rats. I made actually friends with this rat and this ridiculously hot woman walked by and I'm like, did you see the ass on that woman? He said, well, actually, I'm a tit rat myself. I prefer the real stories. Ah, that's why you come here. This isn't CNBC. Agreed. Let's start with our weekly review of market vitals. The S&P 500 declined, the dollar rose, Bitcoin fell, and the yield on 10-year treasuries hit its lowest level since December.

Shifting to the headlines. Tesla's market cap has fallen below $1 trillion, erasing nearly all of the stock's post-election gains. Shares are down more than 25% so far this year.

as investor concerns mount over growing competition and Elon Musk controversies. Warren Buffett announced that Berkshire Hathaway paid nearly $27 billion in taxes in 2024. That is the largest tax bill ever paid by a US company, accounting for roughly 5% of all corporate income taxes collected in the country that year. And finally, BP announced it is shifting back to fossil fuels and scaling down investments in green energy.

The company plans to spend around $10 billion a year on oil and gas to win back investors after its fourth quarter profit hit a four-year low. Despite that move, BP shares closed down about 1.5%. Scott, we'll start with Tesla, and I'm bracing myself for your victory lap here. You predicted on February 13th. I can't help it. I'm a broken clock here.

Tesla is imploding. I think the stock is below $200 in the next six months. It was trading at $356 a share then. We're not below $200, but we're now at $286. So it's down 20% since your prediction. Take it away. I hate this motherfucker. I really, I don't know if you've sensed that. Really? Yeah. I have no emotional distance here.

I'm changing my prediction. I think this thing goes below 150. Oh, keep it. Keep the original. I can't help it. It's at a P of 180, and its sales are off 75% in Germany. And across Europe, they're off dramatically. I think the car line is really stale. To be fair, the stock is still up 50% over the last 12 months, right? It had a huge run-up.

And the market, you could say, you could also make this, you could also steel man and be a weak steel man and be more like an iron man or a hay man. It's clear his activities have really hurt him in Europe and in California, but probably the market was looking for an excuse to take this stock down. I think what will be the real interesting test here in terms of the association or affiliation of an individual's brand and their company is

is if Starlink starts to have contracts canceled. What do you make of this, Ed? Yeah, I mean, I think the question that we've been trying to ask is like, what started this slide with Tesla stock? I mean, it's pretty dramatic what happened. It's down around...

20% in five straight days, falling below a trillion dollars. It's now down 34% since its peak in December. I think the thing that really triggered this is this data that came out from Europe. Tesla's vehicle sales are down

almost 50% across Europe. Meanwhile, overall EV sales across Europe are up almost 40%. So clearly, people just hate Teslas. And it's not very surprising why. I mean, you just look at the UK, for example, where, you know, Elon is talking about how he wants to put

the British Prime Minister Keir Starmer in jail, it's not very surprising that the British public is now saying, hey, we're down with electric vehicles, but we're not going to buy Teslas anymore. And so it's finally being reflected in Tesla's financials. I think the thing that I've been thinking about a lot when it comes to Elon and when it comes to Tesla, I've been waiting for what I would call his Wellington moment. And I'll explain what I mean by that. As I've said to you before,

I think the similarities between Elon Musk and Napoleon Bonaparte, and you're going to call me a history nerd, but I don't care. Just a nerd. I think the similarities are very striking in that you have Napoleon, who was this like miraculously successful guy who took over all of Europe and tried to take over the world, and at the same time was also pretty universally disliked.

But people never really did anything about it because they thought, you know, this guy is so talented. He's so powerful. He conquered the Russians and the Prussians and the Spanish. He installed himself into office. He crowned himself emperor. Like, how could we ever bet against Napoleon? You never bet against Napoleon. And that's basically why people went along with this guy who was acting like

honestly, very irrationally and kind of insane. But it was only when he suffered this crushing defeat at Waterloo against the Duke of Wellington that people realized, actually, maybe this guy isn't untouchable. Actually, maybe he isn't a god. And the whole world turned on him at the exact same time, including the French, by the way,

And he was banished to this remote island where he died sad and alone. And I believe that that moment is coming for Elon. I believe it's going to take some big loss and suddenly all of this mystique and this intrigue and all of our glorification of his leadership abilities and his character and his genius, it's all just going to disintegrate in a second. And...

At that moment, I think the citizens start to turn on him. We've seen that happening already. But more importantly, I think the markets will turn on him too. I think that moment happened 48 hours ago. I think it was Bill Burr. He's probably my favorite comedian. I think the guy's just a genius and he's fearless. And he's been known for being just incredibly politically incorrect. And he's a favorite of what I'll call sort of the intelligent manosphere. And that is he just mocks the shit out of Democrats and political correctness and

And, you know, basically every viewer of MSNBC was grabbing the pearls every time they watch a Bill Burr clip. And he was just totally unafraid to be totally politically incorrect. And he went on a rant. And we should play that. We'll find the clip now. I'll tell you what's funny. I made fun of the fucking Twitter guy for fucking Sieg Heilig not once but twice. And I never look at my emails. I was scrolling through my emails and it said my Twitter account had been flagged for inappropriate—I don't even tweet anymore—

Had been flagged for it. What a fucking baby. Just like Hitler. A fucking baby. Because that's another thing. All of these people that are into fucking Hitler. You know what I mean? And like, look at this guy. Like he was some sort of fucking hero. The guy was one of the biggest fucking cowards ever. All the pain and all the suffering that that guy's caused. And the war crimes the allies had to commit. Firebombing fucking cities to get that motherfucker. When it came time...

For him to pay the price for all the suffering he caused millions and millions and millions of people. Did he face the music? Nope. He gave himself a nice, quick, painless fucking death. That's your fucking hero? I think the worm has turned against this guy. I think that moment you're describing happened 48 hours ago. I still think people think he's invincible. There's no such thing. Agreed. But this is what people believe and this is what the markets believe.

And so this is what I mean. I think you need a moment. You need to see that the God fall from grace. You realize he's mortal. You realize that actually he's not all he was chalked up to be. And suddenly that's when the world collapses in on itself. But we've been talking about Elon for way longer than we should have. So let's just move on to our second headline here, which is Berkshire Hathaway paying $27 billion in taxes today.

last year. I think the thing that's interesting is what Warren Buffett said about this tax bill. Specifically, he was talking in his shareholder letter, in his annual letter to Berkshire Hathaway shareholders. He was explaining how proud he was of paying this tax bill and contributing this revenue to the U.S. government. And I'll just quote

one part of this because I'm... I'm supportive of what he said, but I also take some issue with it. So...

In the letter, he's describing the beginnings of Berkshire Hathaway and how they were struggling at the beginning. And then he says, quote, So he's basically saying,

Look how far we've come. Look what we're contributing to the government.

But at the same time, he's kind of taking a shot at big tech and accusing them of not paying taxes, which is true and fair, and I agree with it. But I do find it a little bit rich coming from Warren Buffett, who has done a very good job of avoiding taxes himself. I mean, if you look at the history of Berkshire Hathaway, they have a long list of tax avoidance strategies, and they've had no problem taking full advantage of them. We could go through some of those examples here.

But what I would summarize this as, I respect the point, but I don't love this holier-than-thou attitude from Warren Buffett, who's kind of presenting himself as like the Jesus of taxes, which isn't necessarily true. But...

Let's hear what you think of this. I assume you're a supporter of this. Yeah, but you got it right. They paid a lot of taxes. If he wants to take a victory lap for it and make a point, good for him. And he has said for a long time, there's no reason I should pay a lower tax rate than my assistant. But his obligation to his shareholders, no one's going to disarm unilaterally. I believe tax rates should go up, but I engage in tax avoidance. I'm constantly thinking about strategies to minimize my tax bill. And there's a ton of ways you can do it legally when you're rich.

And what we've seen is the tax code go from something like 400 pages to 7,000. And those incremental 6,600 pages are there basically to fuck people of your generation and transfer more wealth to my generation and to corporations. And

Cruise lines have weaponized various loopholes. They pay less than 2% for all the tax rates. General Motors in 2023 paid a tax rate of 5%. T-Mobile, which I would think was a very profitable company, pays an effective tax rate of 0.4%.

Every company is going to do the best they can to pay as little as they can. That's their job. We're not doing our job. And that is there have been so many loopholes stuffed into the tax code. And what the misdirect is people think it's about tax rates. It's not. It's about the tax code. And I believe that as a percentage of GDP taxes or corporations are paying the lowest taxes since like 1938. And at some point you got to fund the government. And there's two things to do. There's either deficits or.

Right. Or you got to charge more in different types of consumption taxes. And I've said this for a long time. There's some mythology in the tax code. The bottom half pays almost no federal income tax. They pay a lot of consumption and sales tax, but almost no federal income tax. The people who get most screwed in our tax system are actually Americans.

most of the people who work at PropG Media. And that is, you guys make very good livings, but it's all current income and you live in a high tax domain, New York City. So even as young as you are, you make exceptionally good livings for people your age, even though you may not feel that way. You're probably paying 30 to 40% tax rates at this point. That's a lot of money for a young person. But once you make the jump to light speed and get really rich, you can leverage all these different loopholes, whether it's

1031 exchanges where you can take real estate and roll it into a new investment, a new real estate investment without incurring a capital gain, triggering a capital gain. Even thinking of yourself as a stock, you produce, I have stocks that produce say 100 grand a year in dividends or growth. That gets to grow, not the dividends, but the growth grows tax deferred. Whereas if you're an individual making $100,000, you lose 20% of it every year at least.

So the tax code has basically said, all right, the bottom 99, we're going to basically fund the government with the kind of 50 to 99th percentile. And then once you get above the 99th, your tax rates plummet. And the reason why America puts up with it is that we're so optimistic that people believe at some point they're going to be in the 0.1%.

But corporations, I mean, we just have two choices here. We either need to cut spending and raise taxes or have massive deficits, which are, and it's important that we communicate this to people, nothing but taxes on you and Claire and the rest of the young people of this organization just kind of laying in wait. So I find the whole, I think taxes are a really important conversation. I would like to see the best solution would be an AMT, an alternative minimum tax on corporations and the rich, right?

And that is if you make over, say, $10 million, we want you to pay a 50% AMT. Whatever loopholes you can come up with, great, but you're paying at least 50%. And you think, well, that's a lot, Scott. It's not because every psychiatrist and psychologist and Daniel Kahneman specifically has shown that above a certain amount of money, you lose no happiness.

Any more money doesn't make you any happier, so having a higher tax rate doesn't make you any less happy. And also, these tax rates are lower than they were in the 50s, 60s, 70s, and even in the 80s at those income levels. So I think tax rates could actually come down if you forced everyone to pay those tax rates.

And that is you could lower the top tax rates on people if everyone paid them. You could lower corporate tax rates if everyone paid that rate. I also think that there is something to be learned from Warren Buffett just being happy to pay his taxes. Like that's just on a personal, emotional level. I think if we can, you know, we clearly need to raise more tax revenue. If there is any way for

Americans or people anywhere really to feel a little bit less resentful when they make their tax payments and to feel that feeling of actually having pride and it being a bragging point how much you contributed to the US government which it seems like that's you know everyone who pays their taxes is like fuck this I don't want to pay my taxes but

I do like that Warren Buffett is kind of changing the sentiment there. And I will also shout out Andrew Yang, who one of his great policy proposals when he was running for president was that we should basically have the government send out videos, including local governments, to taxpayers telling them, here's everything we did with your money this week or this month or this year. And I think if you could sort of

just change the mentality when it comes to paying taxes. I mean, it's a little bit of a soft point, but I do appreciate that Warren Buffett is leading that movement of, okay, paying a lot in taxes is not necessarily a bad thing. You're doing a service to your country. I guess you have to start off believing in your country and liking your country to begin with, which is becoming rarer and rarer in America. Let's talk about BP.

And they're deciding to shift away from renewables, investing more in oil and gas. I guess the first question I had reading this headline is, how much did Elliott Management, the activist investment firm, how much did Elliott have to do with this? Because two weeks ago, it was leaked that they had this stake in BP, roughly 5%.

You know, they wanted to clearly address BP's underperformance. It's down 8% in the past year. Meanwhile, Shell is up 7% and all the other energy companies are doing a lot better. And then suddenly two weeks later, we see this turnaround in strategy. So I guess my first question for you, Scott,

To what extent do you think this was Elliot's doing? Oh, Elliot, they're smart people. And Jessica, who runs her activist group, is a really smart guy. And marketing is important, but be clear, this is all marketing. I'm not sure. I think BP was actually, so I ran a brand strategy firm called Profit.

And I think BP was a client. And the running joke around the office was, beyond petroleum. And they'd like, you know, the ad team would hire an Asian dude, put him in a jacket and run a commercial talking about how algae is going to fuel the future automobile. Can 100,000 people in 100 countries come together to build a new brand of progress for the world? We think so. And now BP, Amoco, Arco and Castrol have come together to try. Beyond Petroleum.

They never spent a lot of money. I think right now, what is the research you guys did? That basically BP is allocating somewhere between 3% and 5% of their total capex to renewables. That's just not a lot.

they were never not in oil and gas. And this is basically saying, okay, get rid of all of it. Stop pretending. Stop running the ads beyond petroleum. Just say, petroleum, it's here. So, sorry, you think that—you basically think that they believe that the world wanted them to be a renewable company. So they said, oh, we're a renewable company. And now the world wants them to be an oil and gas company. So they're saying, we're an oil and gas company. Yeah, there's no substance here. This is

This is them pretending for two decades, deciding that the big sunflower beyond petroleum would make them see warm and cuddly as they were belching more carbon into the air than anyone but maybe Exxon and Chevron. Because there is nothing, there is nothing like the arbitrage you get from fossil fuels in terms of the ability to do work, move earth, etc.

create different substances based on this incredibly cheap supply where you get a barrel, an absolute barrel of this shit that can be made into almost anything or provide energy to make almost anything. And the barrel costs 70 bucks. I mean, it's just so cheap. And these guys, these companies are just cash juggernauts.

And basically, Elliot said, stop the bullshit. Stop the virtue signaling. Stop the posturing. You're a petroleum company. You always have been. They are putting $10 billion a year additionally into oil and gas. So I think, I mean, I think I'm sort of half with you in that this is probably what they thought the market wanted because the way the pendulum is sort of swinging back away from ESG. But I would also put forward the possibility that a lot of this has to do with

AI, and just the fact that they couldn't really predict what was going to happen in terms of how AI was going to explode over the next few years. And you've got billions of dollars being plowed into these data centers, which are already one of the biggest strains on power in our economy. And it's expected to double in just a couple of years, quintuple in maybe the next 10. So I do think at the same time, I'm sure there's probably a marketing element to it. I think at the same time, these energy companies are realizing like, shit,

we've been investing in these renewables, which are, you know, probably pretty exciting over the long term, but the short-term demands of AI are way higher than we thought. And the reality is these renewables that we've been investing in, they just, they won't cut it. And if we want to meet demand, we do need more oil and we do need more gas, especially gas. You know, liquid natural gas is like ideal for data centers. So I think I'm like sort of half with you there, but I do think there is some substance here in the fact that

Power demand is just going up. And we're not going to power these data centers with windmills and solar panels. We're going to do it with oil and gas. And so if you're not investing in that, or at least maybe to your point, showing Wall Street that you're trying to invest in that and that you're being realistic about the demands of AI in the next few years, then you're going to get punished. And that's why we've seen BP down, or at least kind of flat,

over the past year or so. It's up 37% in the past five years. Chevron's up 109%. Exxon is up 183%. So they have been getting crushed. And I don't like to be the big energy guy, but I do support this move. We saw a lot of those energy stocks crash recently.

with DeepSeek when all of a sudden people thought, oh, we might not need as much energy. And what you're saying is that was a bit of a headache. In fact, we're still going to need a massive amount of energy. And I met with a guy who's an energy guy, and he said, you got nuclear wrong. He said, and Mia kind of confirmed this in her notes, that the lag to bring energy capacity nuclear online is five, 10 years out at a minimum. And

And that the real play is liquid natural gas, LNG, and that you want to be looking at that space. And it'll be very interesting to see. There's the side note that really fascinated me. I don't know if you saw it, but the number one producer of wind power now is Texas. And we should do a deeper dive at some point on the economics of wind power because it's politically, quote unquote, incorrect or politically sober, whatever the term you want to use is, Texas is.

The economics of wind have made it such that it is now in many ways a better bet than these dirty fossil fuels. We'll be right back after the break with a look at NVIDIA. If you're enjoying the show so far and you haven't subscribed, be sure to give Profiteer Markets a follow wherever you get your podcasts.

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We're back with ProfitG Markets. NVIDIA reported fourth quarter earnings that beat expectations with revenue up 78% from a year earlier. The company also forecasted higher than expected first quarter revenue with the CFO confident in a quote, significant ramp in sales of Blackwell, which is its next generation AI chip. However, NVIDIA also warned that profit margins would be tighter than expected as it accelerates the rollout of the Blackwell chip.

After fluctuating between gains and losses, the stock actually fell slightly in extended trading. Scott, just your headline initial reactions to NVIDIA's fourth quarter earnings and perhaps the market's reaction to those earnings. You had it. You summarized it perfectly, Ed, and that is the market is so used to these companies blowing away expectations that when they don't beat expectations, they don't meet expectations. Right.

And NVIDIA beat expectations on the top and bottom line, and I think the stock's off today. I mean, it's not off hugely, but you summarized it perfect. Expectations have become such that you're expected to massively blow away expectations. But I didn't take a ton away from this. Do you have any thoughts? I think what the market wants from NVIDIA now is...

They need a home run to be fine. They need to consistently hit a home run. And only if they knock the ball literally out of the park will they get a bump in the stock. But, you know, we can just look at the numbers here. So sales up 80% to $39.3 billion. Net income up 80% to $22.1 billion. Beat on revenue by 3%. Beat on guidance by 5%. I think the most important stat here is their data center revenue beat.

They beat data center revenue expectations by 6.3%. And that's, as we know, the most important thing for Wall Street right now. I think they did $115 billion in data center revenue in 2024. It's just unbelievable. So it was a great quarter. But as you say, great isn't good enough. And so they kind of flatlined. But, you know, in my book, that's kind of a win for NVIDIA.

You know, I think a lot of people are expecting at this point that NVIDIA, you know, they're looking for anything to bring the stock down. And so the fact that they were able to maintain themselves is kind of impressive. We should probably talk about DeepSeek and what Jensen Huang said about DeepSeek. He mentioned it pretty much first thing on the call, right?

He said, I'll just quote what he said. He said, quote, models like OpenAI, Grok 3, and DeepSeek R1 are reasoning models that apply inference time scaling, and reasoning models can consume 100 times more compute. So he kind of

sounded bullish on DeepSeek in a way. He then went on to say that DeepSeek is, quote, an excellent innovation, but even more importantly, it has open sourced a world-class reasoning model. Nearly every AI developer is applying R1 or techniques like R1 to scale their model's performance. So if I were to translate what he's saying about DeepSeek, it's that DeepSeek can only be good for NVIDIA.

He says, you know, it can consume more computing power. And I'm not totally sure about that. And I don't really believe him, given what we saw in the research paper where DeepSeek said, no, we consume less compute. But he also said that it's democratizing AI, which will ultimately lead to even more demand for computing power. And on that point...

I do agree with him. I think that, you know, if DeepSeat can make this stuff more accessible, then we're going to see more people accessing it and more people using this stuff, which is only going to lead to more demand for compute, which can only benefit NVIDIA. This is...

We've talked about this before. I think this is Jevons' paradox. A lot of tech bros talk about this, this paradox that the cheaper and more efficient a product gets, the more it is consumed in the real economy. And so Jensen's comments at the start of the call were, this is what's going to happen. It's more accessible. It can only benefit us. I'm sort of with him. I think the 100 times more compute power comment was probably a little bit misleading. But, you know, I look at this and I think, okay, NVIDIA is crushing it. Keep going.

It's great IR, it's great investor relations to turn a bug into a feature, right? That A, confronting it head on. Let's talk about DeepSeek and this is why DeepSeek is...

It's good for us. It's a very well-run company. He's an outstanding CEO. I think Josh Brown said that it's up 100x, and I guess Josh has owned it for 10 years? I couldn't believe when he said that. By the way, we were wondering, how much do you think he put in? I have no idea, but I know I met Josh through his partner, Barry Ritholtz, who's also a very smart guy, and they're trying to be sort of a...

between a hedge fund and their business model and Vanguard. And that is every time their AUM goes up, they charge less money, but they're very, they're not stock pickers. Well, I guess they're stock pickers to a certain extent, but they're very much- They're sober about it. Yeah. They're one of the few funds I've ever thought investing in and even paying fees because they're just very sober kind of level-headed guys and they give it kind of

Give it to you straight. And now, yeah, those guys are fun to go out and eat beef and drink bourbon with. They're such Long Island guys. I don't even like basketball. Which is the most important thing in the wealth management business. You need to be- 100%. If I was going to go to a Knicks game with anybody and then go have a big steak, it'd be those guys. 100%. Look, it's an incredible company. I'm pissed off I never owned it. I have a difficult time seeing where it goes from here based on

based on how just expensive it has become. It was interesting. I mean, I was watching CNBC the night before the earnings, and CNBC had...

Probably every single analyst on their roster come on to talk about this topic and specifically to make a big, bold prediction about it. And it was really interesting seeing all of these analysts getting so fired up. Investors are awaiting the most anticipated report of the whole earnings season just a couple hours from now. The bottom line is if they can beat $38 billion in sales for the quarter, it's going to be a great quarter. What they're going to report this quarter is going to be fantastic.

You know, this does remind me of the bubble, but it's on steroids. I mean, there is a data point, a podcast, a rumor every five minutes. By the way, they had Aswath Damodaran on, and his prediction was NVIDIA's going to beat, but the stock's going to come down a little bit. Aswath absolutely nailed it, as he often does. But I guess the big takeaway for me from watching that and from seeing all of the memes online, on Twitter, on Instagram, on threads, this is basically like,

the Super Bowl for nerds now, for business nerds. That's a new sport, 100%. And there was this great data from the team. Google search volume for NVIDIA beat out at 4 p.m. the day of the earnings. It beat out searches for the New York Times, for Wikipedia, for Instagram, and for ChatGPT. So this really is like, yeah, it's the business Super Bowl. It's one of those moments where the entire business community is coming together and they're making predictions and

It's a ton of fun. It's a ton of fun for CNBC, too. And as someone who's trying to make business news more interesting, I kind of love it. You know what would be a total gangster move is if Elliot convinced NVIDIA to become a petroleum company. That'd be a test. I think you should become an activist and maybe you can pitch that next time. There you go.

We'll be right back after the break with a look at the new American gold card. If you're enjoying the show so far, hit follow and leave us a review on Profty Markets.

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We're taking Vox Media Podcasts on the road and heading back to Austin for the South by Southwest Festival, March 8th to the 10th. What a thrill! We'll be doing special live episodes of hit shows, including Pivot. That's right. The dogs go into the great state of Texas. Where should we begin with?

with Esther Perel, a touch more with Sue Bird and Megan Rapinoe, not just football with Cam Hayward, and more, presented by Smartsheet. The Vox Media podcast stage at South by Southwest is open to all South by Southwest badge holders. We hope to see you at the Austin Convention Center soon. Visit voxmedia.com slash SXSW to learn more. That's voxmedia.com slash SXSW.

We're taking Vox Media Podcasts on the road and heading back to Austin for the South by Southwest Festival, March 8th through the 10th. What a thrill! Chicken fajitas, queso, strawberry margarita, extra shot of tequila. There you'll be able to see special live episodes of hit shows, including our show, Pivot. Where should we begin with Esther Perel?

A touch more with Sue Bird and Megan Rapinoe. Not just football with Cam Hayward and more presented by Smartsheet. The Vox Media Podcast stage at South by Southwest is open to all South by Southwest badge holders. We hope to see you at the Austin Convention Center soon.

I'm not joking. I love South by Southwest. The people are a ton of fun. It's a great time. If you do come, come up and say hi. Visit voxmedia.com slash SXSW to learn more. That's voxmedia.com slash SXSW. We're back with Profit Markets. Trump is launching a new gold card program offering residency and a path to citizenship for wealthy investors. But it comes with a steep price.

Participants will need to pay $5 million directly to the US government, with the funds going toward paying down the federal deficit. The program, set to launch in just two weeks, will replace the existing EB-5 visa program, which grants visas to foreign investors who finance US projects. However, immigration experts argue that Congress must approve this change first. Scott, I'd like to just quickly start off by clearing something up on this EB-5 thing.

The Trump administration is saying that this is no different from the EB-5 program, which was set up in around 1990, I believe. And this is a program where you pay a million dollars to get a green card. They're saying, well, this is the same. It's just five million. Not quite. The EB-5 visa is actually quite different because it's a conditional visa that is dependent on your ability to prove after two years that you have created...

and invested in a legitimate American business, and you have to prove that you have created at least 10 full-time jobs for Americans. So it's different in the fact that it requires actual real investment, not just your money, but your time and your effort and real commitment. And I think to me, that is the crucial difference here. This gold card is very simply pay-to-play. You hand over the cash, you get the visa.

one and done. And I think when it comes to citizenship, that is an important thing to recognize, is you're actually investing your time and your effort and your commitment versus just your money. Well, this isn't anything new. Europe has a bunch of these programs. I think they garner, or different countries in Europe garner, about 3 billion in euros each year from selling different visas. I'm on

tech talent visa here in the UK where I convinced them that I would bring unique skills and they gave me a five-year visa. But there was a similar program, I think, in the first Trump administration where if you purchased a certain amount of real estate, maybe it's for people out of China. Canada has these programs. I mean, this isn't anything new. What's different about this is the price point. And at $5 million, that's just exceptional. And someone did some analysis and said that

If you're going to pay $5 million for a visa, it means you're worth at least $25 million. There are just not that many people that could afford this thing. So this bullshit that we might raise $5 to $50 trillion, I don't have a problem with it. The only thing is, at this price point, if you can't figure out a way to get into America or another Western country for a lot less than this, it means you're on the run from the tax authorities.

Or you're pretty shady. I mean, there's some analogies here. So one of my—when people ask me—by the way, I spoke at the Royal Academy of Arts last night, Ed. I don't know if you heard, if you read about it in the press. I did hear. A friend of mine said he met you, this guy. Oh, the former Goldman guy came up to me and he was like, I know Ed Elson. I'm like, well, I'm good for you. Yeah.

He's a nice man. Very cool. The Royal Academy is very cool. Yeah, it was like a London highlight for me. Anyways, but people always ask in Q&A, how would you distinguish the U.S. from America? And I say, look, my sense is, unfortunately, in the U.K., most of the people I know, including the people in this room, was a room of very successful people. Their servicing wealth built or made somewhere else. And effectively, some form of this was a huge...

A hugely successful program for Britain, and that is, I think it was in the 90s, Tony Blair or the odds, put in place really strict private property laws. And that is, he said, I don't care if you're an African warlord or a Russian oligarch. If you bring $100 million in the UK and you buy a $30 million house in Mayfair, they can't come for it. I mean, they, meaning any other government, can't come and take your shit away. Once you have private property here in the UK or you have money in our banks, no one can come for it.

And people would argue it attracted some unsavory characters. At the same time, the majority of the capital and the majority of people attracted were just very successful people. And over the last 30 or 40 years—and I know this firsthand, having come to the UK once or twice a year for the last 40 years—

London just got a dramatic facelift because it attracted so much capital. The U.S. attracts people who want to make money. The U.K. and a lot of these places attract people who want to spend their money or shelter it. And I wonder what kind of person are we going to attract if they have to spend $5 million to get into the U.S.? One, it's going to be someone very rich who, quite frankly, is a little bit in a hurry to

And why are they – okay, they're rich and they're in a hurry and willing to give $5 million to get into the U.S. That says to me like, okay, the local tax authorities or the local law enforcement is circling, right? And they're closing in on me and I need to get out and get to America. Right.

And so what'll be really interesting, first off, this just isn't gonna raise that much money 'cause I just don't think there's that many people. The market, the total addressable market here is not that big. The most interesting thing about this will be some great investigative journalist will get a source on the inside and he or she will get the names of the 100 people that do this, the first 100, and it's gonna be really interesting to profile those people.

And in one way or another, what this is, is people on the run would be my guess. People who want to get out of the reach of tax authorities or law enforcement in their host nation, because there are cheaper ways to get to America than a $5 million. This is sort of like giving the Trump administration or in the Clinton Clinton did this to a huge donation hoping for a pardon.

To me, this is like effectively a $5 million you're buying a pardon, if you will, from another nation. Because I wonder if, especially with the Trump administration, part of the wink-wink around this is you can't be extradited by another country. I just want to emphasize the numbers here. I mean, you mentioned how the total addressable market is not that big. I just want to

get concrete here. So Trump said, he had this press conference with the cabinet. He said, if a million people buy the golden visa, that's $5 trillion to pay down our debts.

Then he said, if 10 million people buy, quote, which is possible, that's $50 trillion. Let's just be very clear here. Credit Suisse did this analysis of ultra high net worth individuals across the world. So that's people worth $50 million or more. There are only 264,000 ultra wealthy people in the world.

And by the way, 150,000 of those people are American. So that only leaves you with 114,000 people left over, and only those people would even consider getting this golden visa. I think at most, this generates maybe a couple hundred billion dollars. More likely, I think, would be just a few billion dollars. So I just want to be clear about the numbers here. As you said, your instinct was, it doesn't make sense. I'm looking at the numbers. It does not make sense.

Now, the price we pay for that tiny little bit of additional revenue to me is very high. And I hate this. I'm surprised you don't hate it as much as I do, because what this is basically saying is that citizenship in America is now for sale. Well, it has been for a while, Ed, just to be clear. If you have money, you've been able to get into the U.S. for a while. Not with this level of swiftness.

I mean, I don't like this. And I look at you, I think London is the great comparison. I look at what's happened to London. When you go to Knightsbridge, yeah, it's wealthy, but it's also a ghost town because you've got hundreds of these ultra luxury apartments with no one in them because it's just a vehicle for these Russian billionaires who want to park their money somewhere safe. Usually that money was made in very ugly ways. And so they buy these giant apartments at One Hyde Park.

And so America's decided, oh yeah, we like that, let's do that. But I need to get your official, your official where you land on this gold visa thing. What I'm hearing from you is this is stupid, but it's not that problematic because America has always been for sale. Every Western nation at one point or another has been selling visas, has been basically, we live in a capitalist economy. If you have money, you can figure out a way to become a citizen of almost any nation with enough money.

And a lot of people would argue the Trump administration is doing what the government's always done and Democrats have always done. They're just more transparent and more brazen about it. I've engaged in this arbitrage, and that is Claude DiGiocas, arguably one of the two or three most talented people I've ever worked with, a Canadian.

I went to Yale, a gymnast, just so impressive, great presence, hardworking, working at L2. Brings me, I says, can I speak to you? Brings me in the conference room and says, I'm really sorry, but I just got a message or a letter from the INS saying I have to return to Canada. And I'm like, fuck that. I'm like, don't worry about it. I'm like, I can figure this out. I've got money.

And, you know, stay put. Don't worry about it. And we'll figure this out. I lawyered up with immigration attorneys and Claude has never left the U.S. Oh, really? Because I have a lot of talented friends who are having issues with this. I have a Canadian friend. It's gotten much worse the last couple of years. The last two or three years, basically since the first Trump administration. And this is just shooting ourselves in the foot that we're heavy handed with the wrong people.

We need to have borders. We need to be, I'm all for deporting criminals. I'm all for the whole immigration debate. And we're going way past here, but going to the low end, if you wanted to solve this illegal immigration problem, all you would do is find employers, but no one wants to do that. But at the high end, this is just, it's again, another distraction. It's not going to raise that much money. The most interesting thing is the cast of characters it's going to draw, right?

who actually are willing to pay $5 million so they can camp out. It almost feels like the most expensive witness protection program in history. That's good. Let's take a look at the week ahead. We'll see the unemployment rate for February, as well as earnings from Costco, Broadcom, and CrowdStrike. Scott, do you have any predictions for us? I was reading that, essentially, if you look at the history of different sectors or categories of stocks—

and 100 being the most expensive they've ever been, and zero being or one being the least expensive they've ever been, U.S. growth stocks are at 98 right now, meaning that only 2% of the time in history have they been trading at higher multiples on earnings. At the same time, European value stocks are trading at 2%, meaning 98% of the time they have traded at higher multiples throughout economic history or modern economic history.

And so this isn't a prediction, but this is what I'm doing. I am starting to sell down some of my U.S. tech stocks, Apple, Amazon, and some others, and rotating into these very boring European value ETFs. Good luck. But that's what I love about this strategy, because about the time everybody throws in the towel, I remember probably the best investment, I would say, in terms of a lack of volatility is...

In 2010, I started buying homes, actually my partner, I can't take credit, buying homes out of foreclosure in Florida. And nobody wanted Florida real estate. And it didn't seem like it was ever going to get fixed. That's when you invest. And I feel like just your reaction, that means it's time to invest in European value companies.

And there's still some great companies, Nestle, L'Oreal, British Petroleum, Shell, Mercedes. Anyway, so I think this rotation is about to happen, or it might be three months, it might be three years. I think if you have a 10-year time horizon, I think you trim out of U.S. growth and you trim into Florida real estate, which right now is European value.

This episode was produced by Claire Miller and engineered by Benjamin Spencer. Our associate producer is Alison Weiss. Mia Silverio is our research lead. Isabella Kinsel is our research associate. Drew Burrows is our technical director. And Catherine Dillon is our executive producer. Thank you for listening to Prof G Markets from the Vox Media Podcast Network. Join us on Thursday for our conversation with Jonathan Cantor, only on Prof G Markets.

All right, Sean, you can do this promo talking about all the great Vox Media podcasts that are going to be on stage live at South by Southwest this March. You just need a big idea to get people's attention, to help them, you know, keep them from hitting the skip button. I don't know. I'm going to throw it out to the group chat. Kara, you're going to do it.

Do you have any ideas? In these challenging times, we're a group of mighty hosts who have banded together to fight disinformation by speaking truth to power, like the Avengers, but with more spandex. What do you think, Scott? I'm more of an X-Man fan myself. Call me Professor... Can I read minds? I can't really read minds, but I can empathize with anyone having a midlife crisis, which is essentially any tech leader, so...

Minds are important, Scott, but we're more than that. I think that you can't really separate minds from feelings. And we need to talk about our emotions and explore the layers of our relationships with our partners, coworkers, our families, neighbors, and our adjacent communities. I just want to add a touch more. From sports and culture to tech and politics, Vox Media has an all-star lineup of podcasts that's great in your feeds, but even better live.

That's it. All-stars. Get your game on. Go play. Come see a bunch of Vox Media All-stars and also me at South by Southwest on the Vox Media podcast stage presented by Smartsheet and Intuit. March 8th through 10th in Austin, Texas. Go to voxmedia.com slash SXSW. You'll never know if you don't go. You'll never shine if you don't glow.