Latest / The Financial Exchange Show / Why is OpenAI's valuation soaring?

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Why is OpenAI's valuation soaring? · The Financial Exchange Show

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Speaker 2: Moving into the second hour of our show. It's Chuck, Mike,
1:17
and Tucker with you. And the Dow is off two
1:20
hundred and seventy five points right now. The S and
1:22
P's down twenty one, NASDAG is off forty six. So
1:26
all three major US indices moving down a little bit,
1:29
nothing huge, but a modest downward move, about a quarter,
1:32
two two thirds of a percent, depending on the index
1:35
you're looking at.
1:36
Speaker 3: You know what they say about the first three days
1:37
of October, though.
1:38
Speaker 2: Chuck that they come after September. Yes, So the ten
1:44
year US Treasury up another four basis points to three
1:46
point eight two five percent, Not that it is reflecting
1:51
this move today, but Mortgage News Daily yesterday, on the
1:55
back of a move upward in ten year yields, the
1:58
thirty year fixed rate mortgage nationally moved up to six
2:01
and a quarter percent from six point two. So you're
2:03
getting a little bit of upward pressure on rates there.
2:05
The price of West Texas intermediate oil seventy two eighty
2:09
one a barrel up to seventy one a barrel overnight,
2:12
but the tripa national averageur gas price is down another
2:15
six tenths of a cent to three nineteen, even continuing
2:19
to slide as we get into October and gold we've
2:24
got up one dollar and seventy cents announce to twenty
2:27
six seventy one and sixty cents. Uh. There is a
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tech company by the name of open Ai and they
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just raised six point six billion.
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Speaker 3: Dollars, valuing them at one hundred and fifty seven billion dollars. This,
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I believe is the largest private equity raising or private
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equity valuation in history. I don't know.
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Speaker 2: I'm trying to think if that is the case, it's
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up there, it's in the conversation at least. I'm trying
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to think if any companies were larger in you know,
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rounds of funding that they took. But pretty broad group
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of investors here, including a number of you know names
3:12
that had previously invested in the company, you know, Microsoft
3:15
and so on and so forth. Thrive Capital, who you're
3:18
probably not familiar with, because I mean, not many people
3:24
keep like a list of all here are the big VC.
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Speaker 3: Firms at one hundred and sixty seven billion. By the way,
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that puts them in the same market capitalization range as Uber, Goldman, Sachs,
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AT and T, some you know, significant household names.
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Speaker 2: It's kind of a wide range of company. Like you
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look at that and you're like, okay, Uber, Yeah, a
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lot of people use them. Sure, Goldman, Sachs Okay, you know, sure,
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you know, kind of snooty, snobby investment bank, AT and T.
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They're still around.
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Speaker 3: I was gonna say, it feels like they should be bigger,
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but yeah, well.
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Speaker 2: It feels like they should, but decades of mismanagement will
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do that to you. Yes, other companies that invest in this,
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Microsoft investing about a billion dollars of this total, but
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taking on some new investors, including soft Bank based out
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of Japan, in Nvidia actually investing about one hundred million dollars,
4:15
and Kathy Wood from our investment management putting in about
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two hundred and fifty million dollars in an attempt to
4:22
stem the bleeding on just what has been a series
4:26
of horribly performing products over the last several years. After
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it shock, she's got anything left. Admittedly a fantastic twenty
4:34
twenty and twenty twenty one. So when we look at this,
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what does this mean for the company?
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Speaker 3: Well, they're undergoing this shift into a for profit entity
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from their non for profit and so that's going to
4:52
be this messy transition. It's also happening immediately falling departures
4:56
from some major leaders at the company.
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Speaker 2: So I think one thing does is perhaps a.
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Speaker 3: Statement of confidence in the company from some of these
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massive investors. Right, if you have any concern, as say
5:08
Fidelity Management Research, who's placing money into this about leadership there,
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you probably don't do it. And so I think it
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says something about confidence there to see the valuation double
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since the spring with some big names putting money behind it.
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What else it means is, you know, a vast sum
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of money for them to continue to expand and invest
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their capacity and ability to create large language models. But
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I don't think it does anything to clear up for
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me what the future of this technology specifically looks like
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and which companies come to dominate the use of it.
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Speaker 2: Yeah, and look, this is something that when we talk
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about open AIANT and chat GPT, it's probably the household
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name for a these days. But the fact is that
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every major tech company out there is working on some
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form of AI within their products. It might it might
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not be the exact same thing. But like you go
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through and look at your big tech companies and they're
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all trying to do these things internally because they don't
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want to be paying a bunch of money to another
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company that that ends up, you know, being the winner
6:26
on this. Apple's doing their own thing in video. I
6:29
don't know if you guys saw, but earlier this week
6:32
in video at least their own open source modeling programs
6:36
so that you know, people could potentially use what they have.
6:40
Adobe's talked about how they're using it, Salesforce has, Oracle has,
6:45
Cisco is accenture is I mean like basically everyone out
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there aside from IBM is talking about No, IBM's talking
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about it. They're just not real. Isn't it wild that
6:57
IBM had their whole Watson program decades ago, a decade ago,
7:02
more than a decade ago. I don't know how. When
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did they go on Jeopardy two decades ago? Like they
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were the first like public face of you know, hey,
7:11
artificial intelligence. Does anyone even talk about them as being
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in this race right now? No, not even close, not
7:17
even close. Other things that have been confirmed. Jony I've,
7:21
the famous iPhone designer has been confirmed to be working
7:24
with sam Altman and open ai on the hardware space.
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So do we see hardware offerings from open ai in
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the next couple of years? Like, you don't know where
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this is going to go? What form factor would that take?
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Do you think I know where else? Spitballing on this
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like neither of us have any idea. Yeah, I.
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Speaker 3: Genuinely have no real clue. I mean, the lowest hanging
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fruit would seem to be uh like in home, in
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homes wear or in home or wearable AI. I know
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one company attempted that wearable AI disastrous effect.
8:02
Speaker 2: We covered that with how badly reviewed it was.
8:05
Speaker 3: So in home form of AI in some way, shape
8:08
or form, I don't know that that would seem logical
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as well. I suppose it leads to this second piece
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from Bloomberg and the criticism from a major MIT academic,
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not of AI itself. I think he himself admits, Hey,
8:29
this is a revolutionary technology, but he calls out some
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of the same concerns I think you and I and
8:35
many others have expressed, which is, there is a lot
8:39
of blind investment going into artificial intelligence right now, and
8:44
in a worst case scenario, you could see this mania
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going unchecked for years, companies pouring billions of dollars into
8:52
artificial intelligence research and development with no material impact on
8:56
their earnings in the future, and that that's a real
8:59
risk that I think is out there. I'm not. It's
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different from the other risks that have been discussed, like, oh,
9:06
this is not a technology that's going to be usable.
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Speaker 2: It clearly it is.
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Speaker 3: His argument would be it might not impact more than
9:13
five percent of jobs out there in the next decade.
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And the amount of money that these companies are sinking
9:18
into the technology, will they ever see it come back
9:22
in the way of future earnings.
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9:52
Speaker 2: Peace from Boomberg Opinion Today, Boone's Frail Finances give Strikers
9:57
all the power. And it's something that we touched on
10:01
last week, which is, hey, Boeing's finances have gotten bad
10:05
enough over the last couple of years that depending on
10:06
how long the strike goes on with their machinists, you
10:10
end up in a situation where Boeing is at risk
10:12
of a downgrade in the rating of their debt. And
10:15
so there's some urgency on Boeing side to make a
10:18
deal sooner rather than later so that doesn't happen.
10:20
Speaker 3: To be clear, if the strikers had all the power,
10:22
then there wouldn't be a strike. They'd get their wage
10:25
negotiation and this would be done. It's a power struggle,
10:28
that's why you strike in the first place. Sure, but yeah,
10:30
I would agree. It seems to me that Boeing has
10:33
a fair bit more to lose at the moment than
10:36
the striking workers. Now, I mean, the striking workers are
10:38
going without pay, so that's not exactly easy, and they're
10:41
now entering their fourth week. So I won't minimize the
10:45
pain that they are undergoing at the moment. But the
10:49
you know, the measure is that Boeing is talking about
10:51
taking here to shure things up right. They're talking about
10:55
a ten billion dollar equity raise. They're talking about, you know,
10:58
other options that they have to have avoid a debt
11:00
downgrade here, which again tremendously important for a lot of reasons.
11:05
But your borrowing costs should you get downgraded below investment grade,
11:11
just by default go up. And it's not just because
11:14
you know, there's some government organization that says, well, your
11:17
borrowing costs are higher. Now, it's not the Federal Reserve
11:20
determining this, but if you just think logically about it,
11:24
you know lots of people invest in bond funds out there.
11:27
Many many of those bond funds say we will not
11:30
buy your debt unless you are rated investment grade quality
11:33
from the major credit reporting agencies. And so if all
11:35
of a sudden you get downgraded, that means you have
11:39
thousands of sellers of your bonds all in the market
11:42
in the same place. So next time you go raise
11:44
that debt going to be challenging.
11:45
Speaker 2: Can I also say I have a new favorite analyst name?
11:49
What we got Kai von Rumor. When your last name
11:53
is von Rumor, you are built to be a securities analyst.
11:59
The only thing that that would be better is if
12:01
instead of Kai, his first name was by like by
12:04
Von Rumor Byvon Rumor, sell the news like, wouldn't that
12:08
just be fantastic? I'm sorry, it's so good things that
12:14
are not good. The doc worker strike in the United
12:17
States right now four I'm sorry, forty five thousand ISLA
12:21
workers still on strike right now and basically no change overnight,
12:28
no clear progress being made. We don't have any you know,
12:31
unique insights into what is going on there, but a
12:36
piece in the Wall Street Journal talking about, hey, at
12:39
a number of these ports, the top earners do make
12:43
quite a bit of money, you know, not quite what
12:44
you would expect from blue collar jobs. I find this
12:48
to be the kind of writing. It's like it comes
12:53
off as, hey, these aren't really blue collar people, so
12:57
you shouldn't be pulling for them. Like it feels like
12:59
it's in the pocketive management. And I'm not saying these
13:02
doc workers deserve like whatever they want. I'm not saying that,
13:05
but trying to be like, hey, some of these people
13:09
you know are making you know, over one hundred thousand
13:12
and this and that. I don't think that's the core
13:15
of this fight. Sure, the wage, the starting wages, are
13:18
part of it, but it's the idea of being automated
13:21
out of existence. That is the concern to them. And
13:24
I'll also come out and say, look, I don't think
13:26
that that's something that you want to be fighting against
13:29
too hard either, because you get to a certain point where, look,
13:32
if every other port you know, surrounding your country becomes automated, okay,
13:37
eventually it becomes cheaper to import stuff to Mexico and
13:40
drive it across the border, and then you don't have
13:43
as much traffic coming through, and now you can't get
13:45
the hours that you need, and now you're not making
13:47
as much anyways. So I'm not just saying, hey, like
13:51
the workers are all right here, but when you have
13:53
a piece that's talking about these workers make more than
13:56
you think, it's clearly trying to get you to think
13:59
that the work don't deserve what they're asking for.
14:02
Speaker 3: Yeah, I mean, so there is a study done back
14:06
in twenty twenty I think it was that found about
14:08
half of dock workers in the New York City area
14:11
we're making over one hundred and fifty. Yeah, it's four
14:14
years old now, so you know, possible a lot more
14:16
are to be clear, if you're working overtime as a
14:20
dock worker in New York City one hundred fifty. I mean,
14:24
teachers make one hundred and fifty grand in New York
14:25
City in some place. That's not a great measurement of
14:29
all of this.
14:29
Speaker 2: I'd be interested in looking at hey, the Port of Savannah. Yeah,
14:33
show me what the earnings look like there. And again
14:37
they might still be high. But when the when the
14:43
side that, when the ports and shipping companies their latest
14:49
offer is for a fifty percent bump over six years,
14:54
it's telling you that they are willing to continue moving
14:58
in that direction. Like the the pay that they are
15:01
asking for is not the sticking point in my opinion. Yes,
15:04
it's one of them. But it's this pushback against automation.
15:07
And this is a place where I do think that
15:09
the dock workers are not necessarily in the right because
15:14
you're pushing back effectively on technological progress that will make
15:18
things more efficient and cheaper for everyone over time. And
15:22
there's a great quote that I found actually from a
15:27
Swedish labor union leader. We're going full Swede on this today.
15:34
I'll quote here in Sweden. If you're a union if
15:37
you ask a union leader, are you afraid of new technology?
15:39
They'll answer no, I'm afraid of old technology. This according
15:42
to the Swedish Minister for Employment and Integration. I don't
15:47
know how would you pronounce why lva Ilva Ilva Ilva
15:51
sure Ilva Johansson quote the jobs disappear and then we
15:55
train people for new jobs. We don't protect jobs, but
15:59
we will protect workers. Yeah.
16:01
Speaker 3: Now I would argue for the for the union here
16:05
that Sweden probably has a much better track record of
16:09
actually investing in retraining workers than the United States does.
16:11
Speaker 2: So look, I completely.
16:14
Speaker 3: Comprehend why DOC workers are afraid of and striking against
16:19
the idea of automation and your telechnology because quite honestly,
16:23
go take a look at many other industries that you know,
16:26
jobs have disappeared because of changes to those technology. But
16:29
that's a losing fight, and the the you know, operators
16:33
of the docks, by no means should cave to that
16:36
type of thing. And anything that they commit to I
16:39
would anticipate to be a very temporary commitment because any
16:43
any business that's asked to just ignore new and emerging
16:47
technology when it comes to their business.
16:50
Speaker 2: Eventually it becomes a losing business.
16:51
Speaker 3: Yeah, you're not going to stay modernized, You're not going
16:54
to stay competitive and you're eventually going to fail. So
16:57
you know, the wages, that's a that's a very reasonable story.
17:00
And yeah, stories like this about oh they make too much.
17:03
I mean, if you want to go and have that
17:05
argument to that debate about Jeremy Swayman and how much
17:08
of that dude needs to earn, I fall on the
17:10
side of go get paid, Jeremy. But you know, when
17:12
you're talking about a doc worker that's working over time
17:16
to make six figures, I say, go get paid.
17:20
Speaker 2: I mean, ultimately, look, basically, anyone in the United States,
17:26
aside from a very small fraction of people make money
17:30
with their labor, not with their capital. And to just
17:35
you know, to read pieces like this and see the
17:39
clear attempt by capital to say no, don't get paid
17:43
like it just bothers me, I guess is what I'm
17:45
getting at here. You know, we should all be rooting
17:47
for each other to go get paid.
17:55
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18:14
This is the Financial Exchange Radio network, Mike.
18:18
Speaker 2: There's a piece in Bloomberg. It's titled private equity will
18:21
trigger a childcare price crisis? Is that accurate?
18:26
Speaker 3: All right, So let's talk about what the hell they're
18:29
discussing here first. But I have a real problem this article.
18:33
Speaker 2: I do too, because if there's one thing Americans can
18:36
agree on, it's that we don't like private equity.
18:38
Speaker 3: Yeah, it seems to be pretty popular.
18:40
Speaker 2: And so just by virtue of mentioning them, you get people,
18:44
you know, kind of all like I don't want them
18:47
coming into whatever my business is because we think they're
18:50
going to ruin it, because generally they do things that
18:54
are unfavorable to the level of service that you receive
18:58
from those businesses.
18:59
Speaker 3: And there's plenty of facts and evidence go talk to
19:01
I mean, raise your hand if you know of a
19:04
doctor's office or a dental office that has been taken
19:08
over by private equity and you've been heard of the
19:11
story or been dissatisfied with the service. There's plenty of
19:14
evidence of this. I won't debate any of that. The
19:19
argument that they seem to be making here is akin
19:23
to something that happened in Australia where private equity when
19:26
they go and gobble up businesses like this, they often
19:30
do so with a bunch of debt and occasionally that
19:33
blows up in their faces. And in Australia, what happened
19:36
is a private firm that was backed by private equity
19:39
was operating something like one third of all the childcare
19:42
in the country. Yes, and then that company blew up.
19:45
They closed all the centers and the Australian government basically
19:48
needed to bail out the childcare centers and what do
19:52
we call that? Publicize them, make them all public and
19:56
you know, support the childcare sector. So a few faults
19:59
in this art document. One, if one company is operating
20:03
one out of three childcare centers or providing childcare for
20:06
one out of three children in your country, that's what
20:08
we call a monopoly, and you need to break it
20:11
up well ahead of it getting anywhere near there. We
20:13
are nowhere near that place here in the United States. No.
20:15
Speaker 2: The estimate that is cited in this piece is that
20:18
about ten percent of all childcare locations are held by
20:22
some form of private equity, but not by the same one.
20:26
Speaker 3: They also seem to make the argument that consumers prefer
20:31
childcare centers that are run as a non for profit,
20:34
which I can get that. I might prefer that myself.
20:38
But if you prefer that, then go make that choice
20:41
as the consumer and ask the questions about how the
20:44
private you know, how the childcare center is run. They
20:47
then make some argument that like, oh, maybe we should
20:50
just ban private equity from the childcare space in general,
20:54
and I just keep getting to this question, like what
20:57
exactly does that mean? Because if I am considering open
21:01
a private a childcare center, I may want to make
21:04
a profit, and whether that's private equity backed or not.
21:08
I think if you just disallow profit from the childcare space,
21:11
then you're going to have a shortage, a further shortage
21:13
of childcare. So where I conclude with this is make
21:18
a decision either yeah, we're going to continue to allow
21:21
this to exist, or if you're on the other extreme
21:25
of that side, the other conclusion is that you have
21:28
universal pre K provided by the government. There's not a
21:32
good in between. And I'm open to that debate, right Like,
21:35
if you want a debate, hey, we should raise taxes
21:37
and have universal pre K. I think you have some
21:39
compelling arguments. I genuinely think you do have some compelling
21:43
arguments that, hey, this should be treated like kindergarten and
21:46
we should provide public universal pre k Okay, let's have
21:49
that debate. But having a debate about hey, should private
21:53
equity be in childcare? Should it not? That just seems
21:58
like a silly argument to designed to make people scared
22:01
of private equity.
22:02
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Speaker 2: Another another great piece from the Wall Street Journal here
23:16
in service of capital, This one from the editorial board
23:19
titled Lenacon gets punched Back and basically the FTC is
23:23
suing Express Scripts, saying that they basically have a whole
23:29
bunch of practices that revolve around quote, profiting by inflating
23:34
drug costs and squeezing mainstream main street pharmacies and Expresscrips
23:38
wrote a brief in response to this that came out
23:41
this week, and the Wall Street Journal editorial board takes
23:45
that as gospel, because of course what they're saying in
23:48
their legal brief must be exactly how it happened and
23:52
not just a defense against you know, the practices they're
23:55
accused of. And so you get this piece that's like, Hey,
23:59
a company are fighting back against you know, government tyranny
24:04
when I think all of us can look at the
24:06
healthcare sector and be like, this sucks. Can't we do
24:09
something about it? I don't disagree there.
24:15
Speaker 3: I don't disagree that, Hey, look, the healthcare sector has
24:19
just been you know, jumping from one disaster solution to another.
24:24
I think both things can probably be true at the
24:27
same time. And I think it's entirely possible that Lena
24:30
Kon and the FTC have ignored evidence and jumped to
24:33
conclusions and you know, smeared publicly traded companies.
24:39
Speaker 2: Then it will be proven in a court of lawsyights
24:42
don't do the lifting for the company by making it
24:45
seem like, oh, they punched back at the FTC, what
24:50
are we doing here?
24:51
Speaker 3: Yeah, I tend to agree there. So certainly, if Lena
24:56
Khan is found to have you know, over eached and
25:00
ignored the.
25:01
Speaker 2: Facts, then the case won't be successful. And the case
25:03
won't be successful.
25:06
Speaker 3: I guess the only point there would be government authorities
25:10
have a lot of leeway and are not liable for
25:14
defamation and things in the same way that private citizens are.
25:17
And so I think that can be an honest, you know,
25:20
subject of debate, Like, hey, if she's coming out there
25:22
and defaming a private you know, a private company, and
25:24
then there's no liability because well, no, I'm the FTC.
25:27
Then that's a problem. But that's not what's happening.
25:29
Speaker 2: Here right in my opinion, given the state of drug
25:35
costs and healthcare costs in general, levels of service throughout
25:38
many parts of the healthcare system, the burden is on
25:41
the pharmacy benefit manager to prove that it's not just
25:45
you know, playing games. Okay, it's a mess out there, fair,
25:52
but that's just me. Let's take a quick break here
25:55
and when we come back, we'll do a little bit
25:57
of stack roulette.
25:59
Speaker 1: Business and financial news affecting the markets and your wallet.
26:03
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26:26
Exchange Radio Network.
26:34
Speaker 2: Michael, what do you have for me for roulet of
26:36
the stock?
26:38
Speaker 3: I've got a lesson for all of our listeners in
26:41
just how stupid a relationship the City of Boston has
26:44
with alcohol and the way that we manage things like
26:47
liquor licenses. So the City of Boston just issued two
26:51
hundred and twenty five new liquor licenses, which you need
26:55
to be able to sell alcohol in your restaurant or bar.
26:59
The the process that they are rolling out on this
27:03
is intricate and difficult and a pain in the rear end.
27:08
But what they don't want to see a repeat of
27:10
is first come, first served because the one that happened
27:12
last time, apparently the biggest and most well organized restaurants
27:15
out there applied and got the liquor licenses, and you know,
27:19
it wasn't great for smaller businesses throughout the City of Boston,
27:24
which okay, I can understand and have empathy for those
27:28
smaller companies that don't have their act in order to
27:30
apply for a liquor license. But City of Boston, you just,
27:35
in my mind, you need to make a decision. Is
27:37
this issuance of new liquor licenses about raising money? Because
27:41
you are selling these things for I don't know how
27:43
much they go for, but on the secondary market they
27:45
go for half a million dollars or more? So, are
27:48
you doing this to raise money and you want to
27:52
issue new liquor licenses, in which case auction them off
27:55
to the highest bidder, because that's the only fair method
27:58
for it to happen, and you know, give it time,
28:00
Let everybody apply and then auction off to the highest bidder.
28:03
If it's about creating equity in different neighborhoods to make
28:06
sure that underserved neighborhoods that haven't been able to economically
28:10
develop in the same way that say the North End has,
28:13
then just uncap the number of liquor licenses and offer
28:17
them to anybody that applies. It shouldn't be both right,
28:21
coming up with this capped system where they're still going
28:24
for multiple hundreds of thousands of dollars, and then you're
28:27
trying to issue them only in neighborhoods where they're underserved.
28:30
You are just wasting so much of our money as taxpayers.
28:33
And I know I don't live in the City of Boston,
28:36
so I'm not one of them. But how much time
28:39
and effort are you going to pay public employees to
28:42
review applications for liquor licenses here? Just uncap them anybody
28:46
that wants a liquor license, you gotta go get a bond,
28:48
You got to go through a training course to make
28:49
sure you don't overserve people. Whatever the silly stuff you
28:52
need to deal with because of our weird puritan relationship.
28:55
Speaker 2: With alcohol, Go ahead and do but uncap it.
28:58
Speaker 3: Give everybody a liquor license that want, and then we're
29:00
not having these debates around you know, oh, did this
29:04
area of Boston get underserved for years because of racist
29:07
policies coming out of Boston. It can't be both at
29:09
the same time.
29:10
Speaker 2: So do you know where the cap comes from?
29:13
Speaker 3: I would guess you know, anti Irish laws back in
29:17
the day. Actually, no, it was anti Irish laws back
29:20
in the day, right it was.
29:21
Speaker 2: But it's at the state of Massachusetts imposes the cap
29:26
on Boston liquor licenses. It's not a self imposed cap,
29:30
so like Boston's not sitting there like, hey, we'd love
29:33
to cap this.
29:34
Speaker 3: The city of the state of mass The State of
29:35
Massachusetts is what is actually doing it.
29:41
Speaker 2: And again it's it's just kind of wild that like
29:47
there's there's a right number of liquor licenses and we
29:51
know what it's gonna be somehow, except no, you don't,
29:55
because clearly, if they're going for six hundred thousand dollars
29:58
on the secondary market, there's not of them. There are
30:01
not enough of them.
30:02
Speaker 3: We've had all this time about you know how restaurants
30:05
had such an impossible situation over the last few years,
30:08
and they did. They were forced to close and completely
30:10
change their business models. Just release the cap, sell all
30:15
the liquor licenses you want. Who cares if every darn
30:21
restaurant out there as.
30:22
Speaker 2: The law in doing what they need to do.
30:25
Speaker 3: Yeah, what's the problem If they're serving eighteen year olds
30:28
and not checking id's, then take away their liquor license
30:30
and never give them another one correct done.
30:33
Speaker 2: Problem solved. Otherwise allow them to operate.
30:36
Speaker 3: Instead, we're going to go through a year long review
30:38
process of well, does this restaurant in Mattapaian outweigh this
30:42
restaurant in East Boston versus this restaurant in what's another
30:47
traditionally underserved area of Dorchester. Right like that is just
30:52
a silly waste of taxpayer money.
30:56
Speaker 2: And on top of that, look, if too many restaurants
30:58
apply and get them, then there will be too much supply,
31:01
and the ones that you know, can't sell enough drinks
31:04
will go out of business and it'll be self correcting,
31:07
like you'll you'll get there. There's not an infinite capacity
31:12
for ingesting alcohol. By the way, we've seen this with
31:16
another drug, marijuana, in the last few years. There are
31:22
too many pot shops and they can't make any money
31:24
and so some are going out of business. Yes, like that.
31:28
That is how it works when you take risk in
31:30
a business. It should be actually about taking risk that
31:33
sometimes it's not going to work out. Not Hey, I've
31:36
bought into, you know, an intentionally limited resource and there's
31:40
no downside here.
31:42
Speaker 3: Instead, I'm speculating on the future value of liquor licenses.
31:47
Speaker 2: What a stupid market we've created. I'm gonna talk a
31:50
little bit about some pearl clutching for baseball. Uh And
31:55
apparently I've watched like three baseball games all year so which,
32:00
by the way.
32:01
Speaker 4: Miss a good playoffs so far.
32:02
Speaker 2: I got to say it's up from last year where
32:04
I might have watched one because the product is getting better,
32:07
it's improving.
32:09
Speaker 4: They're just real quick in terms of the product. There
32:12
were seven games this entire year out of the entire
32:16
season where there were games over three and a half hours.
32:21
Speaker 2: It's your seven. You're very consistently two and a half
32:25
hours and done, which is exactly where you need to be.
32:28
It's great. I will say that part of it is
32:31
just that the red sox are just not very compelling,
32:34
but that's a different problem. In any case, this is
32:37
a whole piece that is written about how there is
32:42
a German workware manufacturer Strauss, who has put ads on
32:47
top of all of the Major League Baseball playoff helmets. Okay,
32:52
and somehow advertising on helmets is bad. And this is
32:58
even from you know, a person who, in this pieces
33:00
look sell off every cubic inch of the stadium to
33:03
matchsn avenue paint the grass, gatorade blue, turn the foul
33:06
poles into soft drink straws. Great idea, by the way,
33:08
would love that make the bases into Pokemon characters. Not
33:11
sure that that one really clicks, but hey, whatever works.
33:14
Quote my pet causes the buying and selling of the
33:16
baseball cap and baseball uniform and the willingness to diminish
33:20
and clutter what was once a triumph of American sports fashion.
33:24
Screw that allow me to introduce you to the English
33:27
Premier League, where you get a tiny little patch in
33:31
the upper left corner of the jersey and then a
33:34
big o two letter you know, logo across Manchester United
33:38
because you know, like, this is not a this is
33:43
not not a fashion museum. Look, I'm all for great
33:46
looking uniforms in this and that, but hey, having like
33:49
a little advertisement on the hat is not bad. If
33:53
you look at just about every single jersey out there
33:57
right now, there's some kind of alternative sponsorship, you know,
34:00
whether it's the NBA MLB. I don't think the NFL
34:03
allows for them yet, but it's only a matter of time.
34:07
And ultimately this is about making money.
34:10
Speaker 3: People hold on. Like if the Red Sox want to
34:13
completely do away with their uniform, which would be a
34:16
travesty and stupid and a bunch of people would never
34:19
buy them again, go for it other things.
34:21
Speaker 2: Quote where at cap overload today we have regular caps,
34:24
alternate caps, batting practice caps, spring caps, Mother's Day, Father's Day,
34:27
city caps, on and on. How many caps does one
34:29
fan need? Well, look, if they weren't being sold, they
34:31
wouldn't do them. But people keep buying these things, so
34:34
don't blame the teams for this. The reason why there
34:37
are eight different hats that you can buy, and that's
34:39
probably an undercount by like a factor of ten for
34:43
each team is because there are fans who want to
34:46
buy all these different hats, and so if that wasn't
34:50
the case, if people weren't buying them, they wouldn't sell them.
34:56
This is not the team's fault that people like these
34:58
things that you might think you're dumb. Occasionally we all
35:02
do things that other people think are dumb, whether our
35:05
you know, pet thing is even going to sporting events,
35:07
which a bunch of people listening might be like, well,
35:09
we don't like that. Going to concerts, going to Disney,
35:13
going fishing, climbing, hiking, golfing, boating. We all do things
35:18
that cost us money and ultimately we don't need to
35:21
do but we think are fun and someone else thinks
35:23
is dumb.
35:24
Speaker 3: So if you don't like it, don't buy it.
35:26
Speaker 2: I don't buy baseball hats. I my bald head. They
35:29
don't feel good on it because it's too rough. It's wool,
35:33
too rough. I got a very sensitive scalp and so look,
35:38
it's it's not my thing. But ultimately, if someone wants
35:41
to own fifty two red Sox hats, that are all different.
35:45
Speaker 1: I've got it.
35:45
Speaker 2: Making a party life short. Take a quick break. We
35:48
got the jobs report tomorrow. We will see you with
35:51
a full discussion then