Latest / Merryn Talks Money / GMO's Jeremy Grantham on buying start-ups, an AI bubble and why the small-cap premium is a myth

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GMO's Jeremy Grantham on buying start-ups, an AI bubble and why the small-cap premium is a myth · Merryn Talks Money

0:00
Speaker 1: A lot of people get rich in the stock market
0:02
Speaker 1: for the time being. It doesn't change the laws of nature.
0:05
Speaker 1: The higher the market, the lower the returns will be.
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Speaker 1: And I think the probabilities that AI will not bust
0:15
Speaker 1: are slim to none. It meets every condition of the
0:20
Speaker 1: railroads and the Internet. It's a powerful idea that's attracted
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Speaker 1: everybody's money. No one has any doubts. They had no
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Speaker 1: doubts about the railroads and the Internet.
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Speaker 2: Why would they. They were brilliant ideas.
0:32
Speaker 1: And this is perhaps the most consequential idea. And you know,
0:40
Speaker 1: even if it kills us all that that doesn't matter,
0:42
Speaker 1: since we're all dead.
0:55
Speaker 3: Welcome to Maren Took's Money, the podcast in which people
0:57
Speaker 3: who know the markets explain the markets. I am marensumset
1:01
Speaker 3: Web and this week I am speaking with Jeremy grantsam
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Speaker 3: now for my entire career plus a bit. Jeremy has
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Speaker 3: been one of the most distinctive and the most well
1:09
Speaker 3: known contrarian voices in global investing. The British investor co
1:13
Speaker 3: founder of GMO, the Boston based asset manager, he built
1:17
Speaker 3: his reputation warning constantly about bubbles, everything from the Japanese
1:21
Speaker 3: bubble to the great dot Com bubble in two thousand two,
1:24
Speaker 3: housing in the run up to the global financial crisis.
1:27
Speaker 3: So with that track record, he is known by everybody
1:30
Speaker 3: as something of a perma bear. Is he really a
1:33
Speaker 3: perma bear or is he not? His new book rather
1:36
Speaker 3: suggests he is. The title The Making of a Perma
1:39
Speaker 3: Bear The Perils of Long Term Investing in a short
1:41
Speaker 3: term world. GRANTHERLM reflects on the experiences that have shaped
1:45
Speaker 3: his outlook and brought him to this position. We've had
1:49
Speaker 3: Jeremy on before, but Jeremy, it is so marvelous to
1:51
Speaker 3: have you back. Welcome to Myron talks Money.
1:54
Speaker 2: Hi nice to be back.
1:56
Speaker 3: The book is absolutely jammed full of the lessons that
1:58
Speaker 3: you have learnt along the way. And I suppose the
2:01
Speaker 3: first bit of that was in the seventies and eighties
2:04
Speaker 3: when you were really getting going, and later into the nineties.
2:07
Speaker 3: This idea that all of the premiums that people think exists,
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Speaker 3: the small cap premium, that this bremium, that premium, none
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Speaker 3: of these things really exist. The only thing that you
2:16
Speaker 3: found that really works is value. That's it.
2:19
Speaker 1: In the end, there's one exception to that. I think
2:23
Speaker 1: we made probably many mistakes in the book. Yeah, and
2:28
Speaker 1: that's quality. A triple A bond yields a point less
2:33
Speaker 1: than you tell a B bond, let's say, And everyone
2:37
Speaker 1: thinks that's right and proper. You buy a high quality bond,
2:40
Speaker 1: you take less risk, you should make less return. But
2:43
Speaker 1: the triple A stocks do not. The triple A stocks
2:46
Speaker 1: actually have slightly outperformed the rest of the market something
2:49
Speaker 1: close to half a point in perpetuity. And that is
2:53
Speaker 1: a free lunch. They should be minus one eight percent
2:57
Speaker 1: reel for the market. It should be seven percent real,
3:00
Speaker 1: surely for high quality, and it's been eight and a half.
3:03
Speaker 1: And that is ridiculous. And that's always been a dagger
3:06
Speaker 1: to the heart of the efficient market hypothesis. And we
3:10
Speaker 1: took it very seriously and built lots of quality into
3:14
Speaker 1: even our small cap value portfolio.
3:16
Speaker 3: Okay. And the other thing that you added in was momentum.
3:21
Speaker 3: There was a period when you were running value plus momentum,
3:23
Speaker 3: which seemed like an excellent idea. And as you said,
3:26
Speaker 3: the fact that momentum works is another dagger to the
3:28
Speaker 3: heart of anyone who believes in efficient markets, but is
3:31
Speaker 3: explained purely by the fact that we are human.
3:34
Speaker 1: One of the very famous professors had said categorically there
3:39
Speaker 1: is no information in pricing alone. And I was able
3:43
Speaker 1: to say, if from the day he wrote that book,
3:46
Speaker 1: you bought the starks that advanced the highest ten percent
3:49
Speaker 1: of the year before, and you held them for the
3:51
Speaker 1: following year, you made three or four points a year
3:53
Speaker 1: for the next twenty years.
3:55
Speaker 3: So why don't we always only do that? Why bother
3:57
Speaker 3: with the rest?
3:59
Speaker 1: Well, because, as in many things in life, just as
4:03
Speaker 1: you get good at it and happy with it and
4:05
Speaker 1: think it's a free lunch, it dribbles away. So it's
4:09
Speaker 1: much more difficult and smaller than it was back in
4:14
Speaker 1: nineteen eighty two.
4:15
Speaker 3: Yeah, as soon as you see it, it disappears.
4:18
Speaker 1: Well it wasn't.
4:19
Speaker 2: That's the tease. It was there for twenty years.
4:22
Speaker 1: It got us thoroughly hooked, and then kind of dribbled away,
4:26
Speaker 1: slowly but surely.
4:28
Speaker 3: Going back to small caps, I mean, there is a
4:29
Speaker 3: persistent belief that there is a small cat premium that
4:32
Speaker 3: is not necessarily just about value. It's about small caps
4:36
Speaker 3: in themselves. And I know that people will look at
4:39
Speaker 3: that and they say, well, this premium still existed, just
4:41
Speaker 3: that the cycles of underperformance are incredibly long, but it
4:45
Speaker 3: was the long term. There is a small cat premium.
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Speaker 1: We based our entire firm at Battery March on small
4:52
Speaker 1: cap and it did brilliantly well, and so we moved
4:58
Speaker 1: into a larger cap value as we started GMO. But
5:04
Speaker 1: small cap is very complicated because how do you define it.
5:08
Speaker 1: You define it by shuffling the pack every year. And
5:11
Speaker 1: that isn't a buy and hold. That's a value technique,
5:16
Speaker 1: isn't it. When you shuffle the small cap, what you're
5:18
Speaker 1: doing is selling the winners and buying the losers.
5:23
Speaker 2: So you're increasing the value.
5:25
Speaker 1: If your small cap do very well, they become medium
5:28
Speaker 1: cap and you get rid of them. And if the
5:30
Speaker 1: medium cap does very badly, it becomes a small cap
5:33
Speaker 1: and you acquire it. And you do that quite a
5:36
Speaker 1: lot every year. And if you take that out, there's
5:40
Speaker 1: no evidence that small cat works.
5:42
Speaker 3: I mean, this is a This is the fascinating idea
5:45
Speaker 3: that the small cat premium doesn't exist. It's simply a
5:47
Speaker 3: function of this, the reffing premium, rebalancing, the rebalancing value.
5:53
Speaker 1: Yeah, and even in value stocks, a lot of that,
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Speaker 1: about half of it back in the day, was due
6:01
Speaker 1: to reshuffling, because there again you become a value stock.
6:05
Speaker 1: If you're a growth stock that does really badly, you
6:07
Speaker 1: become a value stock, And if you're a value stock
6:10
Speaker 1: that really does well, you become a growth stock. So
6:13
Speaker 1: you have that reshuffling and regression to the mean being
6:17
Speaker 1: what it was at least for fifty years until recently.
6:21
Speaker 1: That was also a guarantee that value would do much better,
6:24
Speaker 1: and it did, so it was one hundred percent of
6:27
Speaker 1: small cap. And the other thing about small cap and
6:30
Speaker 1: value is that they're low quality.
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Speaker 2: They are really junk.
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Speaker 1: You should expect a premium, and in the case of
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Speaker 1: small cap, you do not get a premium that is
6:38
Speaker 1: big enough to justify the low quality. Historically, you get
6:43
Speaker 1: the reshuffling premium and you get the low quality premium,
6:47
Speaker 1: and that's it.
6:48
Speaker 3: Okay. So the recent underperformance of the small caps is
6:52
Speaker 3: really a function of the underperformance of value.
6:55
Speaker 2: Yeah, no, partly that.
6:57
Speaker 1: And I suspect that the kind of rhythm of capitalism
7:02
Speaker 1: has shifted post two thousand quite a lot, and we
7:08
Speaker 1: have allowed the fairly steady growth of monopoly, so that
7:14
Speaker 1: the concentration in each industry has gone up, some dramatically
7:19
Speaker 1: and some marginally, but they've gone up in every industry group.
7:23
Speaker 1: And that's a measure of the rich and powerful and
7:27
Speaker 1: the monopolists, and it's terrific for making money monopoly, it's
7:33
Speaker 1: not terrific for GDP growth. So the GDP growth has
7:36
Speaker 1: steadily slowed since two thousand. You don't get that feeling
7:40
Speaker 1: reading about marketplaces. You get the feeling that we're it
7:43
Speaker 1: would be this has never been growth like this, But
7:45
Speaker 1: it's not true. The growth rate of the total GDP
7:50
Speaker 1: has slowed quite substantially since two thousand, and it appears
7:54
Speaker 1: to be slowing again, and that I think is the
7:58
Speaker 1: same thing. Monopoly are bad for GDP and good for
8:03
Speaker 1: corporate profits. So corporate profits are a higher percentage of
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Speaker 1: the total pie now than they have ever been in history.
8:10
Speaker 1: This is the era of the rich and powerful and
8:13
Speaker 1: the big corporations having all the power and making a
8:19
Speaker 1: lot more money, and the small corporations and the individuals
8:25
Speaker 1: below fifty percent getting squeezed. So they have never been
8:30
Speaker 1: they have never had a smaller fraction of the assets.
8:33
Speaker 1: The bottom fifty percent, they've never had a smaller fraction
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Speaker 1: of income, and the same with small corporations.
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Speaker 2: They have been squeezed and squeezed, and that's fine for
8:44
Speaker 2: the S and P.
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Speaker 1: It's fine for aggregate profits and the domination of the
8:50
Speaker 1: largest one hundred names, which has become steadily stronger and stronger.
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Speaker 3: Well, this is emptinct. It brings us back to one
8:58
Speaker 3: of your core ideas, the reversion to the mean, because
9:01
Speaker 3: the dynamic that we're talking about here slows and disrupts
9:05
Speaker 3: everything reverting to the mean. Right, So if we go
9:08
Speaker 3: back to talking about some of the earlier bubbles that
9:10
Speaker 3: you talked about a lot. So let's go back to
9:12
Speaker 3: the nineteen nineties when you talked a lot about meme reversion,
9:14
Speaker 3: and there was that that wonderful image that you use
9:18
Speaker 3: the feathers in a storm. You know, you throw out
9:20
Speaker 3: feathers in a storm, and they will eventually hit the ground.
9:23
Speaker 3: You can't say where, and you can't say where, but
9:24
Speaker 3: one thing you can know for certain is that they
9:26
Speaker 3: will hit the ground. There will be a reversion to
9:30
Speaker 3: the mean. And so when you go back to those
9:32
Speaker 3: earlier bubbles, that tech bubble, the gray bubble in Japan,
9:36
Speaker 3: et cetera, that held good. You could see it and
9:39
Speaker 3: feel it coming right.
9:41
Speaker 1: Yes, and I have no reason to doubt that that
9:45
Speaker 1: is still the same if you The iron lore, sadly
9:50
Speaker 1: is that if you double the price of an asset,
9:53
Speaker 1: you have the return from holding it from there on.
9:57
Speaker 1: If you take the yield down from eight percent, And
10:00
Speaker 1: by the way, in nineteen seventy four, to get into
10:03
Speaker 1: our portfolio, you had to have a yield of ten percent,
10:06
Speaker 1: and the market sold at seven times earning. So don't
10:09
Speaker 1: think that eight and ten percent yels don't ever exist.
10:12
Speaker 1: But if you take the ten down to five, it's
10:15
Speaker 1: pretty obvious to anyone. A you've made a lot of money,
10:18
Speaker 1: you've doubled your money, and b from then on you're
10:21
Speaker 1: going to have a much reduced return by five percent
10:24
Speaker 1: a year of yield alone, plus or minus whatever the
10:28
Speaker 1: market does in the future.
10:31
Speaker 2: And that's it, guys.
10:33
Speaker 1: If you want to have the highest market in history,
10:36
Speaker 1: you will have the lowest returns in history going forward.
10:39
Speaker 1: And that is just a simple mathematical relationship. And it
10:44
Speaker 1: will happen this time. And my guess is after a while,
10:48
Speaker 1: sooner or later, the market will become a whole lot cheaper.
10:52
Speaker 1: It may not become as cheap as it was in
10:54
Speaker 1: nineteen seventy four, it may not even get back to
10:57
Speaker 1: the trend from nineteen hundred to two thousand, but it
11:00
Speaker 1: will get a hole lot cheaper than it is today.
11:03
Speaker 1: I don't think we're willing to settle for the embedded
11:07
Speaker 1: return at these levels, which if it gets back to
11:12
Speaker 1: recent trend even you'll have a negative return for the
11:15
Speaker 1: next ten years and you won't have much for the
11:17
Speaker 1: next twenty years.
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Speaker 3: Yeah, should we go back to the nineteen nineties, because
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Speaker 3: I found that very interesting. There's lots in the book
11:24
Speaker 3: about the debates that you had. It is kind of
11:27
Speaker 3: rock star style debates between you and the great bulls
11:32
Speaker 3: about what was going to happen, what wasn't going to happen.
11:34
Speaker 3: And it was here where I suppose you really made
11:37
Speaker 3: your name with ordinary investors. Obviously you were letters before
11:39
Speaker 3: that roll fascinating performance was amazing, lots of great stuff happening.
11:42
Speaker 3: It was in this run up to the end of
11:45
Speaker 3: the tech bubble where I think you'd have Suddenly you
11:47
Speaker 3: were all over Barons and Forbes talking about these things,
11:51
Speaker 3: and to you it was very obvious bubble. You went
11:55
Speaker 3: to all these debates, you spoke to all these investment committees, etc.
11:58
Speaker 3: And for everyone else it didn't seem to be so clear.
12:04
Speaker 3: But in fact, one of the things that you talk
12:06
Speaker 3: about is how really everybody knew. Everybody knew, but they
12:09
Speaker 3: couldn't take the career risk or the benchmark risk of
12:13
Speaker 3: accepting the truth.
12:15
Speaker 1: One of the most important things I ever did, and
12:20
Speaker 1: one of the keys in the book no one ever
12:23
Speaker 1: takes any interest.
12:25
Speaker 2: In, and that is when I was debating.
12:29
Speaker 1: The balls, I would ask the audience a few questions,
12:36
Speaker 1: and these were this was the critical one was the
12:38
Speaker 1: national the annual meeting of the Financial Analyst Society, and
12:45
Speaker 1: it was in Los Angeles, I think certainly in California,
12:49
Speaker 1: and there was a cast of thousands, you know, fifteen
12:51
Speaker 1: hundred people or so. And before I did my debate,
12:57
Speaker 1: I was allowed to go first by Jeremy Siegel, now
13:01
Speaker 1: Dean of Wharton, and I eagerly accepted. And then I
13:06
Speaker 1: played a dirty trick by asking the audience hands up,
13:11
Speaker 1: who considered themselves full time professional stock players institutional stock players,
13:17
Speaker 1: and four hundred, according to me and my friends counting
13:21
Speaker 1: about four hundred put their hands up, and I said, right,
13:24
Speaker 1: I have two questions only for you. One if the
13:29
Speaker 1: current pe which is thirty one, comes down to seventeen
13:35
Speaker 1: anytime in the next ten years, will it guarantee a
13:38
Speaker 1: major bear market? And the boat was one hundred percent.
13:41
Speaker 1: They said yes, it would guarantee. So I said, right
13:44
Speaker 1: now we get to the jackpot, how many of you
13:47
Speaker 1: think it will come down? And I was so shocked
13:51
Speaker 1: I had to ask the question three times rephrase it.
13:53
Speaker 1: Only two people in the audience of that four hundred
13:57
Speaker 1: thought it would not come down to seventeen, and of
14:00
Speaker 1: course it did, yes, But three hundred and ninety eight
14:03
Speaker 1: people in the engine room of the Goldman Sixes and
14:07
Speaker 1: the JP Morgans and so on, Morgan Stanley's, they believed
14:11
Speaker 1: in data that guaranteed a major bear market in the future.
14:17
Speaker 1: And the people on the podium, however, their bosses or
14:22
Speaker 1: their marketing bosses, let's put it that way, were saying, Jeremy, Jeremy,
14:26
Speaker 1: LESBI serious, don't get so carried away. The market is
14:29
Speaker 1: okay and we'll muddled through. I think that's a fair
14:31
Speaker 1: statement for the top of the market.
14:34
Speaker 2: And people don't get that.
14:36
Speaker 1: They thought, because they only hear the bosses, they thought
14:40
Speaker 1: that intelligent opinion was that the market would keep going,
14:44
Speaker 1: and in fact, intelligent research opinion. The real experts would
14:49
Speaker 1: have said, we guarantee a major bubble breaking here, and
14:53
Speaker 1: no one knew that, and no one cared when I
14:55
Speaker 1: pointed it out. And in the end we had over
14:57
Speaker 1: one thousand people polled who were claiming to be professionals.
15:03
Speaker 3: Yeah. So, while you look like an outlier with your
15:05
Speaker 3: opinions there in the late nineties, in fact the engine
15:08
Speaker 3: room agreed with you.
15:10
Speaker 2: Absolutely.
15:11
Speaker 1: And what we found then and ever since is the
15:15
Speaker 1: obvious fact that it is not a business strategy to
15:18
Speaker 1: be a bear in a bubble.
15:20
Speaker 2: You have to be a ball.
15:22
Speaker 1: You can't take the career risk of the bull market
15:25
Speaker 1: going on a year or two longer than you thought.
15:28
Speaker 2: So you can't do it. So you.
15:31
Speaker 1: Jump off the cliff together, and as Kin said, you're okay.
15:35
Speaker 1: If you do that, you will never lose your job.
15:38
Speaker 1: Just be a little quicker and slicker, get out a
15:40
Speaker 1: little faster and more thoroughly, get back in more timely,
15:45
Speaker 1: and that will do you fine. The last thing you
15:48
Speaker 1: want to do is something where you run the risk
15:51
Speaker 1: of being wrong on your own. If you do that,
15:53
Speaker 1: he said, quote, you will not receive much mercy because
15:56
Speaker 1: sooner or later you'll be wrong, yeah, and or wrong
15:59
Speaker 1: enough and you'll get fired, which we did particularly in
16:04
Speaker 1: that bubble.
16:05
Speaker 3: Yeah, enormous amount of business in the late nineties, right
16:09
Speaker 3: and quickly.
16:10
Speaker 2: Yeah, we had a good record.
16:12
Speaker 1: And then in two and a quarter years ninety eight,
16:14
Speaker 1: ninety nine and early two thousand, we lost about half
16:18
Speaker 1: hour market share. Everyone else was going through the roof
16:22
Speaker 1: and we were dropping. We dropped from thirty billion to
16:25
Speaker 1: twenty in a ball market.
16:28
Speaker 3: That's not bad, not bad at all. And then interestingly,
16:31
Speaker 3: once you were proven right, which everyone knew you would be,
16:34
Speaker 3: that money didn't come back. Those old clans didn't come
16:37
Speaker 3: back to youth. That was a really interesting behavioral tick.
16:40
Speaker 3: They didn't want to admit to the wrongness of moving
16:43
Speaker 3: the money away, so they just didn't come back.
16:45
Speaker 1: No, no, And again how difficult that is. You have
16:50
Speaker 1: to imagine selling a stock at three and buying it
16:55
Speaker 1: back at twelve. You know, you can't do that kind
16:57
Speaker 1: of stuff. Ordinary humans can't.
17:00
Speaker 3: Yeah. But of course, see the lessons here are for
17:04
Speaker 3: the ordinary investor. The individual investor doesn't have career risk,
17:07
Speaker 3: doesn't have benchmark risk. It can be more honest about
17:10
Speaker 3: their investing. And when you go into the lessons Lessons
17:13
Speaker 3: learned from the nineteen nineties. The lesson number one is
17:16
Speaker 3: do not believe the consensus and particularly the bullish propaganda. Propaganda.
17:20
Speaker 1: Yeah, the individuals have a huge advantage lack of career risk.
17:26
Speaker 2: They could really nail it.
17:27
Speaker 1: Wait until it's obvious that there is a bubble, easily
17:31
Speaker 1: defined by the way we do it to sigma. But
17:34
Speaker 1: you can do it by just looking at the moving
17:36
Speaker 1: average pe and when it's clearly in the top five percent,
17:40
Speaker 1: better yet two and a half percent, get your tail
17:44
Speaker 1: out of the market. And you can do it, and
17:47
Speaker 1: every time in history so far, in every major stock
17:50
Speaker 1: market that will have made you money. Yeah, and you
17:54
Speaker 1: don't have to get.
17:55
Speaker 2: Out into money under your mattress.
17:58
Speaker 1: You can get out into whatever is read simply priced.
18:01
Speaker 1: In January, the last time we talked and podcasts I
18:05
Speaker 1: did at the beginning of this year was saying there
18:07
Speaker 1: is nothing to worry about outside the US. This is
18:10
Speaker 1: a very focused market, rather like the tech bubble of
18:14
Speaker 1: two thousand wars. But the rest of the world then
18:17
Speaker 1: and early this year was really quite reasonable.
18:21
Speaker 2: And international value is up.
18:23
Speaker 1: Forty five percent in the last year, and Japan is
18:27
Speaker 1: up a lot emerging markets is up thirty five or forty.
18:31
Speaker 1: They've all trashed the SMP. The SMP did much better
18:35
Speaker 1: than one would have expected. Of course, that happens in
18:38
Speaker 1: every great bubble that has happened several years. That's the
18:41
Speaker 1: definition of a great bubble. If they turned down conveniently,
18:44
Speaker 1: they're they're just ordinary bubbles. If they keep going for
18:47
Speaker 1: a year or two or three, like Japan, they and
18:50
Speaker 1: the tech bubble and this one, they become the great bubbles.
18:53
Speaker 1: And this one looked like a bubble ready to break.
18:57
Speaker 1: In twenty twenty one. December twenty twenty one, I wrote
19:01
Speaker 1: it a quarterly called Let the Wild Rumpus Begin, because
19:04
Speaker 1: every condition that I looked for was in place, and
19:08
Speaker 1: it was a nice bear market. It went down twenty
19:10
Speaker 1: five percent, The mag seven went down almost fifty the
19:14
Speaker 1: gross scalps went down thirty five and the bond market
19:16
Speaker 1: went down more than any year in history. But the
19:21
Speaker 1: market didn't go down to trend. It didn't go down
19:24
Speaker 1: as much as I would have thought. And the reason
19:26
Speaker 1: for that was pretty clear at the time, and that
19:29
Speaker 1: was chat in December of that year, interfering with a
19:35
Speaker 1: nice bear market, in my opinion, and a chat rattled
19:40
Speaker 1: every cage because once you visited it. I visited about
19:46
Speaker 1: day three or something like this, and I asked it
19:49
Speaker 1: to summarize war and peace in twelve points, which it did,
19:52
Speaker 1: and then I said, please do that in German, and
19:56
Speaker 1: I thought, holy cow, this is going to do some
20:00
Speaker 1: things unbelievably well. And it's become obvious to everybody that
20:06
Speaker 1: AI is very significant, and the capex, the capital spending
20:11
Speaker 1: around that it's become so prodigious that it carried the
20:15
Speaker 1: market up initially kicking and screaming. The market for eleven months,
20:21
Speaker 1: went down X the MAG seven in twenty twenty three,
20:26
Speaker 1: but the MAG seven went up so much that the
20:29
Speaker 1: S and P went up, and finally the ordinary starts
20:32
Speaker 1: through in the towel and joined in. And the capex
20:35
Speaker 1: has really kept the economy ticking over quite nicely. Without
20:39
Speaker 1: the capex associated with AI, of course, we would have
20:42
Speaker 1: been a flat to down economy. And the other the
20:46
Speaker 1: hard thing there is the canes in effect of animal spirits.
20:49
Speaker 1: If you took out AI, and you took out the
20:52
Speaker 1: massive capex one and a half percent extra of GDP,
20:55
Speaker 1: what would animal spirits be like?
20:57
Speaker 2: They might easily have tipped into.
20:59
Speaker 3: A recept Yeah, there are session the most predicted recession
21:03
Speaker 3: in history that didn't happen.
21:05
Speaker 1: Well it yeah, but it didn't happen because AI and
21:08
Speaker 1: AI is you can live a couple of lifetimes and
21:12
Speaker 1: not bump into something like AI, I expect. I think
21:16
Speaker 1: it's probably much more significant, significant than anything we've experienced.
21:22
Speaker 1: And we've experienced some pretty important things. Really, the ability
21:27
Speaker 1: to stream any movie you want at the touch of
21:30
Speaker 1: a finger, this is These are.
21:32
Speaker 2: All quite remarkable.
21:33
Speaker 1: And then read the papers and then do this, and
21:35
Speaker 1: then your emails.
21:38
Speaker 2: The internet has been really very important. But I think.
21:43
Speaker 1: Almost everyone agrees that potentially this is bigger. Of course,
21:49
Speaker 1: it may it may wipe us all out. I've just
21:51
Speaker 1: finished the book. If anyone builds it, everyone dies.
21:56
Speaker 3: Yes, and yes. It's a depressing title, isn't it pretty?
21:59
Speaker 1: It's a wonderful title. Who doesn't envy that title? That
22:03
Speaker 1: is one of the more effective titles I can think of.
22:28
Speaker 3: Let's talk about the US market now. I mean, you've
22:30
Speaker 3: sat through a lot of bubbles here, including even the
22:33
Speaker 3: nifty to fifty, right, which I think you said was
22:35
Speaker 3: the only real quality bubble in history. And some might
22:38
Speaker 3: argue that in AI we have another quality bubble. You know,
22:41
Speaker 3: earnings exist. There is not not dot Com. It's not
22:44
Speaker 3: so obviously a bubble as many of the other bubbles
22:47
Speaker 3: that we've sat through. How does it look to you now,
22:50
Speaker 3: with anything changed since our conversation a year ago.
22:53
Speaker 1: I think it's obviously a bubble, and I think it's
22:58
Speaker 1: quite a simple story. Bubbles don't occur when there's some
23:04
Speaker 1: crummy idea that gets pouted. People often say that and
23:08
Speaker 1: think that, and it's simply not true. All the bubbles
23:11
Speaker 1: are associated with serious pain, and the more serious, the
23:15
Speaker 1: bigger the bubble. And if it's important, really important, perhaps
23:20
Speaker 1: more important than anything else, And if it's obvious, then
23:24
Speaker 1: you're dealing with the handful. Like the railroads, everyone knew
23:28
Speaker 1: the railroads would change the world for the better. Everyone
23:32
Speaker 1: knew it was the most powerful idea they'd come across
23:34
Speaker 1: in their lives.
23:35
Speaker 2: And it was.
23:37
Speaker 1: And everyone put their money in, and everyone wanted to
23:40
Speaker 1: buy to build yet another railroad between Manchester and Leeds,
23:46
Speaker 1: and so you had multiple tracks and everybody lost their money,
23:50
Speaker 1: and the bubble broke broke, and it brought the economy
23:54
Speaker 1: to its needs. Pretty year or two, and then it
23:56
Speaker 1: regrouped and the railroads carried us to glory, and then
24:00
Speaker 1: Internet the same. Do you know Amazon went up six
24:04
Speaker 1: or seven times in ninety nine and then in the
24:09
Speaker 1: break it came down ninety two percent.
24:12
Speaker 2: I am not kidding you.
24:13
Speaker 3: Check it amazing.
24:15
Speaker 1: In three years of decline, Amazon comes down ninety two
24:18
Speaker 1: percent despite being the key idea really of that generation,
24:23
Speaker 1: and then inherits the world in the rally. And that's
24:27
Speaker 1: the way it works. And just think about Japan too.
24:30
Speaker 1: Japan was terrifying even American industry. They were making better semiconductors,
24:37
Speaker 1: much better televisions. Everyone bragged about their eight inch black
24:41
Speaker 1: and white tea Sony TV. In the kitchen, everything was Japanese.
24:46
Speaker 1: And then it broke, and that's the way it goes.
24:49
Speaker 1: It was that was the biggest bubble in history, by
24:51
Speaker 1: the way, Japan, biggest equity bubble in a major country,
24:55
Speaker 1: and the biggest real estate bubble in history at the
25:00
Speaker 1: same time at the same time. That's the real No. No,
25:03
Speaker 1: by the way, separately, and do it separately unless you
25:08
Speaker 1: want to spend twenty years in the wilderness, which they have.
25:12
Speaker 3: But then there's let's go back then to this idea
25:15
Speaker 3: of monopolies and constantly rising profit margins. And one of
25:18
Speaker 3: the things you keep going back to in the book
25:20
Speaker 3: is this idea that what stock markets really like is
25:24
Speaker 3: relatively stable GDP growth doesn't really matter how high or low,
25:27
Speaker 3: as long as it's stable, low inflation and rising profit margins.
25:31
Speaker 3: And one of the things that you see now is
25:34
Speaker 3: all those things are there, and profit margins just don't
25:37
Speaker 3: seem to have reverted to the mean. And we've been
25:39
Speaker 3: sitting around expecting that mean reversion for a long time.
25:42
Speaker 3: Hasn't happened because I think of what you were mentioning
25:46
Speaker 3: earlier about the rise of the oligopolies and monopolies preventing
25:49
Speaker 3: it from happening. So does that mean that this market
25:52
Speaker 3: could go on for longer than even you might expect.
25:56
Speaker 1: This is the canary that gets swept up in the
25:59
Speaker 1: hurricane with a couple of feathers from my experiment in Florida,
26:06
Speaker 1: and it literally happens. Tropical birds do get swept up
26:10
Speaker 1: in hurricanes and scent hundreds and hundreds of miles north,
26:14
Speaker 1: and it happens once in a blue moon.
26:16
Speaker 2: And this is what's happening now.
26:18
Speaker 1: We're watching the Canary in the hurricane. We're watching these
26:24
Speaker 1: profit margins go higher and higher and higher, and they had, obviously,
26:30
Speaker 1: I would have said, obviously in a normal world, reached
26:33
Speaker 1: excessive levels. And then we hit the current administration, who
26:38
Speaker 1: can't spell the words excessive levels. And they're very happy
26:45
Speaker 1: with a continued concentration into the super powerful companies. And
26:51
Speaker 1: the super powerful companies, you know, are allowed to use
26:54
Speaker 1: their influence, so why not they do, And the more
26:59
Speaker 1: influenced they have, the higher the profit margins go. It's
27:02
Speaker 1: a perfectly good game and a lot of people get
27:05
Speaker 1: rich in the stock market for the time being. It
27:08
Speaker 1: doesn't change the laws of nature. The higher the market,
27:11
Speaker 1: the lower the returns will be. And I think the
27:16
Speaker 1: probabilities that AI will not bust are slim to none.
27:22
Speaker 1: It meets every condition of the railroads and the Internet.
27:27
Speaker 1: It's a powerful idea that's attracted everybody's money. No one
27:31
Speaker 1: has any doubts. They had no doubts about the railroads
27:34
Speaker 1: and the Internet. Why would they. They were brilliant ideas.
27:37
Speaker 1: And this is perhaps the most consequential idea. And even
27:43
Speaker 1: if it kills us all that doesn't matter, since we're
27:46
Speaker 1: all death so and if it doesn't, then you reckon.
27:50
Speaker 1: You own the right thing. That's the appeal. And so
27:55
Speaker 1: my guess is in video will lead it down, and
27:59
Speaker 1: all the will follow for a while, and then out
28:02
Speaker 1: of the ashes several of them will once again inherit
28:07
Speaker 1: the inher.
28:09
Speaker 3: I mean, it's and what prompt that I mean, if
28:12
Speaker 3: we go back to the nifty to fifty, there was
28:14
Speaker 3: everything went so right for so long, and then it
28:17
Speaker 3: didn't take much in the way of little bits of
28:19
Speaker 3: failure creeping in here and there for everyone to lose confidence.
28:23
Speaker 3: It's something like that, right, isn't it.
28:25
Speaker 1: I did a lot of research on the nifty to fifty,
28:28
Speaker 1: and they'd had an abnormal ten year window when no
28:31
Speaker 1: one failed. The nifty to fifty went on to be
28:34
Speaker 1: the nifty fifty ten years later. Ten years after that,
28:38
Speaker 1: five six or seven of them had been decapitated literally
28:43
Speaker 1: avon out of business sort of thing.
28:46
Speaker 2: And Xerox and.
28:48
Speaker 1: Wonderful, huge, powerful companies one minute and ten years later
28:53
Speaker 1: hanging on by their fingernails, soon to go.
28:55
Speaker 2: Out of business.
28:57
Speaker 1: And the list was was pretty extensive. And that will
29:02
Speaker 1: do it.
29:03
Speaker 2: It broke the bubble.
29:04
Speaker 1: They had a fifty percent premium on fair value for
29:07
Speaker 1: the only time in history, and they haven't had a
29:11
Speaker 1: big premium despite the mag seven, they have not had
29:14
Speaker 1: a big premium recently.
29:16
Speaker 3: So we should we should ask what what do people
29:18
Speaker 3: do now? As you say, we talked about international value,
29:21
Speaker 3: We talked about the great opportunities they were out with
29:24
Speaker 3: the US. There was there was loads to invest in them.
29:26
Speaker 3: So if you followed the advice that you gave at
29:28
Speaker 3: the beginning of last year, you would have had a
29:30
Speaker 3: manthless twenty twenty five. It's not quite so easy now,
29:34
Speaker 3: is it.
29:35
Speaker 2: No, it's not. It's not as attractive.
29:37
Speaker 1: It's pretty it's even easier psychologically because you're buying things
29:41
Speaker 1: that have done pretty well. Yes, and now absolutely much
29:44
Speaker 1: much cheaper than the US. Yes, still, and my colleagues
29:50
Speaker 1: assure me that they're reasonably priced. Still, they've gone from cheap,
29:56
Speaker 1: which is much better, to reasonably priced or a modest premium.
30:00
Speaker 1: But compared to the US, they're so brilliant. I would
30:03
Speaker 1: stand my ground. Indeed, in my family accounts that's precisely
30:06
Speaker 1: what I'm doing. But the question is, having gone out
30:09
Speaker 1: forty five percent, how much more am I willing to
30:12
Speaker 1: take before taking profits? I think another twenty percent, I
30:15
Speaker 1: will start to reduce that position, but I think it's
30:22
Speaker 1: for the time being, it's it's looking pretty good, okay.
30:25
Speaker 3: And what about precious metals. I mean, I know that
30:27
Speaker 3: obviously gold is not your obsession like some of us,
30:29
Speaker 3: but there have been times in your career where you
30:31
Speaker 3: have bought gold, right, I think two thousand and seven
30:33
Speaker 3: you would buy gold. Would you touch precious metals now
30:36
Speaker 3: or has that moved into bubble territory?
30:38
Speaker 1: Do you think I'm afraid I'm psychologically crippled now on
30:43
Speaker 1: precious metals. I have done so badly that I think
30:47
Speaker 1: I should leave them alone. They have no dividend and
30:50
Speaker 1: you can't eat them, yep, and so on. And yes,
30:53
Speaker 1: they have a twenty thousand year or twelve thousand year
30:57
Speaker 1: head start over over bitcoin, but that suffers from the
31:03
Speaker 1: same lack of of eatability or dividend Flowah.
31:09
Speaker 2: And silver is a little different.
31:12
Speaker 1: Silver has a lot of growing commercial value, but a
31:16
Speaker 1: lot of it is faith as well, So I leave
31:20
Speaker 1: that for someone else. It's not investing in any traditional
31:23
Speaker 1: sense any more than bitcoin is.
31:25
Speaker 2: It's psychological stuff.
31:28
Speaker 3: Psychological backup. But we need that, we need that. But
31:31
Speaker 3: let me ask you that name one of the we
31:33
Speaker 3: We've spoke about Alan Greenspan a little earlier, and you
31:36
Speaker 3: were very critical of him in the run up of
31:38
Speaker 3: the dot com bubble. You felt that he didn't understand
31:40
Speaker 3: how dangerous bubbles were and what he was leading us
31:42
Speaker 3: into with monetary policy. And then you weren't particularly impressed
31:45
Speaker 3: with Binunki ee there, I remember you saying that he'd
31:48
Speaker 3: spent a lot of time studying the nineteen thirties and
31:50
Speaker 3: and taken every single wrong conclusion from that study. And
31:54
Speaker 3: so there is this controversy now this week about the
31:57
Speaker 3: role of the FED and the independence of central banks.
32:01
Speaker 3: How do you feel about that?
32:03
Speaker 2: Let me just have one swinging, quick swing at Bananke.
32:07
Speaker 1: Okay, Banankee presides over the biggest housing bubble, the only
32:10
Speaker 1: housing bubble up till then in US history. The US
32:14
Speaker 1: housing market had bubbled in Florida, crashed simultaneously in Texas,
32:18
Speaker 1: and it kept it pretty much even as a country.
32:22
Speaker 1: It needed Greenspan's relentless pressure on lowering rates to bubble
32:27
Speaker 1: the entire US real estate market at the same time,
32:31
Speaker 1: and based on the prices it went to three sigma,
32:35
Speaker 1: much higher than two thousand tech bubble much higher than
32:38
Speaker 1: today's bubble inequities. It was, statistically speaking, the great outlier,
32:44
Speaker 1: like Japan in the US market was our housing market
32:48
Speaker 1: went from very stable to a Himalayan peak. And right
32:52
Speaker 1: at the peak, he said, the US housing market merely
32:56
Speaker 1: reflects a strong US economy. The US housing market has
33:01
Speaker 1: never a bust, And he was right. The US housing
33:04
Speaker 1: market had never busted. And as I wrote the time,
33:07
Speaker 1: it had never bust because it had never bubble before,
33:10
Speaker 1: and every bubble has always broken. And if you look
33:13
Speaker 1: at that housing bubble, it is perfect three years up,
33:16
Speaker 1: three years down, it looks like that. How is it
33:20
Speaker 1: possible for the FED boss, with his statisticians, his advisors,
33:25
Speaker 1: right at the peak of a three sigma outlier, to
33:28
Speaker 1: say that the business is normal?
33:30
Speaker 2: Please explain.
33:32
Speaker 1: It's incomprehensibly stupid for someone who has studied nineteen twenty nine. Anyway,
33:38
Speaker 1: on to now, I am slightly well, No, I am
33:42
Speaker 1: moderately less against the current guy than his predecessors.
33:47
Speaker 2: I think he started very much.
33:49
Speaker 1: In tune with them, with the three, the bubble three
33:56
Speaker 1: I think of them, and.
33:59
Speaker 2: Then he it became a little more serious.
34:04
Speaker 1: And you can't be serious in today's world without expecting
34:09
Speaker 1: some careers.
34:10
Speaker 3: Yes, fair enough, you said earlier when we were talking
34:13
Speaker 3: that now maybe one of the examples of turning points
34:17
Speaker 3: in history when the institutions are wrong, when the groups
34:22
Speaker 3: the institutions that may have been trusted for some time
34:27
Speaker 3: are no longer trustable.
34:29
Speaker 1: Yes, And I think this is the biggest failing of
34:34
Speaker 1: ordinary investors is a failure to realize that if you've
34:40
Speaker 1: done your homework, you've looked at the data, you really
34:43
Speaker 1: can be right, and the authorities can be wrong. At
34:47
Speaker 1: turning points, the authorities are nearly always wrong, and I
34:54
Speaker 1: don't think it's it's a bug. I think it's part
34:58
Speaker 1: of the system that they will be wrong for the
35:01
Speaker 1: following reason. If you have a large organization, you will
35:04
Speaker 1: typically be led by someone with substantial political skills. Right,
35:11
Speaker 1: And if you have political skills, you understand Canes and
35:15
Speaker 1: Chapter twelve better than anybody.
35:16
Speaker 2: Never be wrong on your own or you'll not receive
35:21
Speaker 2: much mercy.
35:21
Speaker 1: Just make sure that all your mistakes have plenty of company,
35:26
Speaker 1: and you'll do fine. And so what happens at a
35:29
Speaker 1: turning point is turning points are lethal. No one can
35:34
Speaker 1: accept the career risk of a turning point, so they
35:37
Speaker 1: all predict it will keep going. They all look around
35:40
Speaker 1: nervously at each other, but they keep going. As long
35:43
Speaker 1: as the music's playing, they're going to be dancing. Doesn't
35:47
Speaker 1: matter that they know the market is silly. They're still dancing,
35:50
Speaker 1: and they've confessed to it, and we know that that's
35:52
Speaker 1: how it works.
35:53
Speaker 2: And then when one of them jumps, another.
35:56
Speaker 1: Jumps, and pretty soon every last one of them jump
35:59
Speaker 1: because last one out is there.
36:02
Speaker 2: Donkey yeah, And.
36:03
Speaker 3: What do you think the institutions the affects are mainly
36:05
Speaker 3: wrong about At the moment.
36:07
Speaker 1: You just have to say to yourself, what is likely
36:10
Speaker 1: to be a great turning point? Yes, I think it's
36:14
Speaker 1: obvious that internet investing near term, regardless of how well
36:18
Speaker 1: it does in the long term, that near term it
36:21
Speaker 1: will be overdone and it will have a bust. And
36:24
Speaker 1: I expect the authorities to be completely relaxed about that
36:28
Speaker 1: and not mention it in round numbers, or if they
36:31
Speaker 1: mention it, mention it in a way that will not
36:34
Speaker 1: be taken seriously, and that there's been a few of those.
36:36
Speaker 3: So the tail investor can be ahead of them.
36:39
Speaker 1: I think also about the share of profits There are
36:43
Speaker 1: many ways to have your share of profits drop, and
36:48
Speaker 1: it may be that you can squeeze the bottom half
36:55
Speaker 1: so much that it weakens the structure of GDP. You
37:00
Speaker 1: have no demand, no dependable demand, because they have no money,
37:04
Speaker 1: they can't pay their auto loans, and the automobile industry
37:08
Speaker 1: starts to collapse. After all, if you only sold cars
37:13
Speaker 1: to the top half, you would go out of business.
37:17
Speaker 2: And that's the risk.
37:20
Speaker 1: And that's clearly at a peak that goes all the
37:24
Speaker 1: way back to the Gilded Age of the late nineteenth century.
37:28
Speaker 1: We have more inequality the retail world, the consumption world
37:35
Speaker 1: is kept going by the very rich, by the top
37:37
Speaker 1: ten percent. They account for an unprecedented large fraction of
37:43
Speaker 1: the total. And how long can that go on before
37:49
Speaker 1: the poor just can't buy enough for certain day to
37:56
Speaker 1: day products like automobiles and so on.
37:58
Speaker 3: Is that not partly just a function of an age society.
38:03
Speaker 1: I think is farther than unequal society, and you can
38:06
Speaker 1: have aging and inequality running quite separately, I believe. And
38:12
Speaker 1: Japan is not that unequal, by the way, much further
38:16
Speaker 1: down the aging cycle than we are, but much less
38:19
Speaker 1: far down the inequality cycle than we are.
38:21
Speaker 3: There are a few more things they really want to
38:23
Speaker 3: ask you before we end, And the first is that
38:25
Speaker 3: you took quite a lot in the book about bench
38:26
Speaker 3: capital and how that is your obsession at the moment.
38:29
Speaker 3: Is investing back to your obsessions? Is investing purely via
38:34
Speaker 3: a viavene capital as opposed to be in the listed markets.
38:37
Speaker 3: Is that something that everyone else should be doing too,
38:39
Speaker 3: or is that something that is particularly good for a
38:43
Speaker 3: very rich, long term foundation such as yours.
38:46
Speaker 1: I like it in abstract because when you buy and
38:50
Speaker 1: sell shares, you're not helping the GDP in any way.
38:53
Speaker 1: You're just shuffling the paper. And if you don't own it,
38:57
Speaker 1: someone else owns it. It doesn't make any difference. It's
39:01
Speaker 1: it's fun. It might make you money, but it's irrelevant.
39:05
Speaker 1: When you do a venture capital project, you are facilitating
39:12
Speaker 1: the best in the world structure for getting masses of
39:17
Speaker 1: new ideas into business. It is so good that they
39:21
Speaker 1: come from all over the world, people with a great idea,
39:24
Speaker 1: with real ambition. They come to America, and twenty five
39:29
Speaker 1: percent of the CEOs are foreign born, relatively young people,
39:34
Speaker 1: and on some measures it's up to fifty percent. For
39:37
Speaker 1: this and that and the other. But certainly we draw
39:41
Speaker 1: them in because we have the best system, and we
39:44
Speaker 1: are much much better and always have been at starting
39:49
Speaker 1: new firms, taking risks, raising money, losing money, trying again,
39:54
Speaker 1: pivoting all those good things. So it is dramatically more
39:58
Speaker 1: dynamic and useful venture capital.
40:00
Speaker 2: So I like that.
40:02
Speaker 1: Secondly, if you hit one digital equipment made its investors
40:07
Speaker 1: two thousand times their money work that one out. The
40:11
Speaker 1: best we have ever had is two hundred on Snapchat,
40:15
Speaker 1: and it was a tiiny position, sadly, but you don't need.
40:19
Speaker 1: If we'd had that on a big one, that would
40:21
Speaker 1: have made our foundation for life more or less. But
40:25
Speaker 1: we join this with our mission. We are trying to
40:30
Speaker 1: make a difference in climate change and to address climate
40:34
Speaker 1: change technology to help drive down green energy costs, geothermal fusion.
40:40
Speaker 2: All of these things.
40:42
Speaker 1: That is terrific for the world if you win, terrific
40:46
Speaker 1: for the returns to the foundation if you win, and
40:50
Speaker 1: there is every reason to believe that if you have
40:53
Speaker 1: a hundred of those on average, you'll make a decent return.
40:56
Speaker 1: The money comes back. You put it out again and
40:59
Speaker 1: again and again. Ad in forn item. So a portfolio
41:02
Speaker 1: of mission driven venture capital, with any luck, will have
41:06
Speaker 1: a dramatic effect.
41:08
Speaker 3: Okay, so if you were starting if you are starting
41:11
Speaker 3: out again today, Jeremy, you say, I mean, I know
41:13
Speaker 3: that you come to the end of the book saying
41:15
Speaker 3: that you actually think that investment management is something of
41:18
Speaker 3: a trivial industry. And at the beginning, you know you
41:20
Speaker 3: loved it for its ideas, it's creativity, and for making
41:23
Speaker 3: you rich, etc. But you get to the end of
41:25
Speaker 3: your career and you look back and you say, well,
41:27
Speaker 3: maybe that was a little trivial. I don't agree, by
41:29
Speaker 3: the way, but we haven't got time for that. But
41:31
Speaker 3: if if you are starting out.
41:33
Speaker 2: Today, I'm surprised you don't agree.
41:35
Speaker 3: I don't agree because I will talk about this another time.
41:38
Speaker 1: For me, in your job, your career risk would prevent
41:41
Speaker 1: you from now.
41:42
Speaker 3: I agree in lots of ways that there are all
41:44
Speaker 3: sorts of problems with it. But on the other hand,
41:46
Speaker 3: the investment industry, over time does a perfectly adequate job
41:51
Speaker 3: of taking people's savings and maintaining them for them while
41:54
Speaker 3: they do other things. And I think that is a
41:56
Speaker 3: very very valuable thing to do. So yeah, there's the
42:00
Speaker 3: but it's.
42:02
Speaker 2: Not nearly as valuable as a venture capital effect.
42:04
Speaker 3: But most people can't be in venture capital all the time.
42:07
Speaker 3: So my question was if you were starting again today,
42:11
Speaker 3: I think starting a business Leyels is much harder in
42:13
Speaker 3: an olygo ballistic world. Between a young person today, what
42:17
Speaker 3: would you say, don't be doing this investment management business.
42:20
Speaker 3: Maybe go into something VC or maybe just go study engineering,
42:23
Speaker 3: or what would you say to a young person starting
42:25
Speaker 3: out with you say all of that? All of that.
42:28
Speaker 1: There are so many long term, uncomfortable risks coming along
42:34
Speaker 1: faster than most people realize that it would be good
42:38
Speaker 1: to have some practical skill. So get a practical skill,
42:41
Speaker 1: or get into venture capital and study useful lines of
42:46
Speaker 1: attack such as the ones I was describing. But regenerative farming,
42:52
Speaker 1: you know, we need to farm in a more sustainable way.
42:55
Speaker 3: Absolutely, we need to do a lot.
42:57
Speaker 1: Of things in the more sustainable way, but certainly we
42:59
Speaker 1: needed nearly infinite green energy. That's the biggest one of
43:04
Speaker 1: all I think, and we may, by the way, a
43:07
Speaker 1: geothermal if you do a good job on how you
43:13
Speaker 1: convert that energy, if you learn to make do with
43:16
Speaker 1: the lower temperature bingo, if you learn to drill and
43:20
Speaker 1: handle the heat bingo These are fabulous ideas that could
43:24
Speaker 1: give you twenty four hour, dependable, cheap, infinite heat. You
43:32
Speaker 1: don't run out, by the way, the heat from the
43:34
Speaker 1: center of the earth just keeps going outlivers all by
43:37
Speaker 1: a lot.
43:38
Speaker 3: Okay, so kids go back into farming.
43:40
Speaker 2: I mean homosapians, not a single line.
43:42
Speaker 3: Well, we don't know if we're going to live another
43:44
Speaker 3: couple of weeks at this right, Do we what the
43:45
Speaker 3: books you're reading?
43:47
Speaker 2: We don't.
43:48
Speaker 3: Jeremy, thank you so much for coming on today. It's
43:50
Speaker 3: been green.
43:50
Speaker 2: Thank you for having me.
43:54
Speaker 3: Thanks for listening to this week's Marin Talks Money and
43:56
Speaker 3: if you want to watch this episode, check it out
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44:04
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44:09
Speaker 3: I met Mariness w and John is John Underscore Stepic.
44:12
Speaker 3: This episode was hosted by me Maren zumset Web. It
44:15
Speaker 3: was produced by Someersadi and Moses and with help this
44:17
Speaker 3: week from Stacy Wong. Sound designed by Blake Maples and
44:21
Speaker 3: Aaron Casper, and special thanks of course to Jeremy Grantham