Prof G Markets: The Whole Market Looks Expensive — Is it Time to De-Risk?

Date: November 17, 2025
Hosts: Scott Galloway & Ed Elson
Vox Media Podcast Network

Episode Overview

In this episode, Scott Galloway and Ed Elson confront a troubling question pulsing through the investment world: Is it time to de-risk given that the whole stock market looks expensive? They analyze recent warnings from prominent financial experts, dive into possible market risks and timing pitfalls, debate what defensive investing genuinely means, and examine the uncomfortable evidence that traditional safe havens—like defensive stocks, real estate, and even gold—may carry more risk than before. Beyond markets, they take a sweeping look at housing policy, America’s energy future, China’s AI surge, and the sociopolitical headwinds undermining U.S. competitiveness.

1. Setting the Stage: Sentiment Shift and Market Anxiety

Timestamps: 01:18–09:23

• Ed introduces the growing sense of unease in markets, reflecting on how even legendary optimists are starting to sound bearish.
• He references Professor Aswath Damodaran, who for the first time is considering moving money into cash and even collectibles due to the lack of undervalued opportunities.

  "He said there is, quote, no place to hide in the stock market." — Ed (07:27)

• Goldman Sachs predicts U.S. equities may underperform global peers for the next decade and suggests diversifying beyond the U.S.
• Recent sell-offs in tech highlights fears about overvaluation, interest rate risks, and the subsequent rise in bearish sentiment—not fully mirrored in actual stock prices.
• Michael Burry's shorting and hedge fund closure illustrate how difficult it is to time the market highs and lows.

2. Expert Insights and Timing: Damodaran’s Warning

Timestamps: 09:23–14:43

• Scott emphasizes the rare weight of Damodaran's caution, describing how for 25 years he's trusted Damodaran, who historically urged investors to “stay in the market.”

  "It's rattling... I have never heard that tone from him of just, like, he was reaching so far to try and find value that he started talking about collectibles." — Scott (11:40)

• The conversation highlights the near-impossibility of market timing, referencing historic examples where even correct bubble predictions didn’t directly translate to successful outcomes due to market momentum.

  “The markets can stay irrational longer than you can stay liquid.” — Scott (14:43)

3. Market Madness: No Place to Hide

Timestamps: 14:43–25:05

• Ed and Scott discuss historically high market valuations: The Shiller P/E ratio is higher than 99% of historic periods.
• Major “defensive” stocks like Walmart and Costco are valued on par with growth stocks.
• Gold and bitcoin have both run up dramatically, undercutting their traditional appeal as safe-haven alternatives.

  “Gold is up 55% this year on pace for its best performance since 1979... I finally threw in the towel and bought some shares in a bitcoin treasury company... 50% destruction in like two months.” — Scott (21:19)

• Real estate emerges as a rare area with potential, but even that is compromised by high prices.

4. What Should Investors Do? De-Risking Strategies and Diversification

Timestamps: 25:05–33:31

• Advice offered:
  • Trim exposure: Reduce positions, especially in overrepresented single stocks (no more than 5% in one stock).
  • Diversify further, especially outside the U.S.: Emerging markets like China and Brazil remain relatively cheap.
  • Consider equal weight indices over standard S&P 500 funds: Tech is now a dangerously large portion of mainstream indices (e.g., Nvidia >7% of S&P 500).
  • Move some assets to cash, bonds, or special situations: E.g., “special sits” like real estate or uncorrelated investments.

  “There is more incentive, more reason, today to start to think about de-risking, decreasing your leverage, figuring out where you're overexposed..." — Ed (26:10)

• Scott reflects on his own shift towards risk reduction after decades of aggressive investing.
• Ed urges younger investors to stay diversified and accept market cycles; older investors should avoid excessive risk.

5. AI, China, and Energy: Geopolitics as a Market Force

Timestamps: 42:37–55:09

• New Chinese AIs (Moonshot’s Kimi K2) are outpacing U.S. models on price and performance.
  • $2.50 per million tokens (vs. GPT-5’s $10).
  • China’s energy advantage: produces double the renewable energy vs. U.S., driving down AI model costs.

  “China produces way more energy than America… two times more wind power, three times more solar power, six times more hydroelectric power...” — Ed (45:00)

• The U.S. is falling behind due to political resistance to renewables, with the “anti-woke” culture war derailing logical investment in infrastructure.

  “We need to make smart equal patriotic equal cool ... But this stupid feminization and conflating renewables with femininity, as bad thing, and if we’re real men, we’re going after oil... Just put that shit aside.” — Scott (48:24)

Notable Cultural Critiques

• The politicization of renewables—a branding and culture war issue more than pure economics—threatens U.S. innovation lead.
• The “basic” way to restore competitiveness: stop making infrastructure and energy a tool of ideological identity.
• Debate segues into the broader dysfunction of American both-side extremism, from performative wokeness to anti-renewable energy stances.

6. U.S. Housing Crisis

Timestamps: 59:03–68:20

• The median age of first-time buyers hits 40 (a record); the share of first-time buyers has collapsed.
• 50-year mortgages are floated as a fix—but hosts agree this is financial engineering, not a real solution.

  “I think the 50 year mortgage is a bad idea. It lowers your payment marginally, but then you just build equity at a slower pace.” — Scott (59:57)

• Scott hammers the role of boomer-aged exclusionists: zoning, permitting, and NIMBYism have restricted housing supply to the wealth-protecting advantage of older generations.

  “My generation is just so fucking selfish... We figured out a way to increase our net worth by creating a rejectionist exclusionary culture...” — Scott (61:55)

• Effective policy recommendations:
  • Deregulate zoning, especially parking/height/lot-size rules.
  • YIMBY-style laws: make it dramatically easier to build.
  • Incentivize supply growth (e.g. grants to municipalities that increase supply).
  • Age-targeted, lower-rate government mortgages.
  • Massive private sector engagement.

  "It's a supply problem. It's easy to figure out." — Scott (67:02)

7. Memorable Quotes & Moments

Trust and Social Commentary

• “The key to being offensive is it has to be funnier than it is offensive. And I don't think I got there with this one.” — Scott (01:18, on jokes)
• “People say, oh, he's an introvert. He doesn't like people. That's not true. I just want to make sure people don't really get the full picture of what's going on here.” — Scott (29:54)

AI Bubble and Market Risks

• “If OpenAI gets a shit kicked out of it and announces it's just not growing, they're the canary in the coal mine for Nvidia... Nvidia goes down 80%... That's a $4 trillion destruction in capital... wealthy households all over America start pulling back their spending...” — Scott (37:26)

On American Malaise

• “Put more money in the pockets of young people. They're 24% less wealthy than they were 40 years ago. I am 72% wealthier. ... The most basic thing to fix America right now is: transfer it into the pockets of people under the age of 40. Full stop.” — Scott (64:49–65:34)

8. Week Ahead / Closing Highlights

Timestamps: 69:34–71:20

• Key earnings watch: Home Depot, Target, Walmart, Lowe’s; Klarna's first public quarter; Nvidia’s results.
• Scott’s prediction: The White House is about to unleash a “nuclear” distraction to divert from Epstein email leaks.

  “They have to pull out a nuclear weapon of distraction and they’re either going to start bombing… some crazy shit is going to come out of the White House in the next seven days…” — Scott (70:45)

• Amusing closing reflection on San Francisco, the city’s nightlife, and a comparison to his first marriage.

9. Key Takeaways

• Even long-term market bulls are cautious—many assets appear expensive with no obvious “safe” alternatives.
• Timing the market remains a mug’s game; asset allocation and de-risking, especially for older investors, becomes more critical.
• The AI arms race is being shaped as much by energy policy and culture wars as technology itself—China is poised to capitalize.
• The U.S. housing crisis is fundamentally about supply; financial gimmicks don’t address the root problem.
• America’s generational wealth imbalance and cultural infighting are undermining long-term prosperity.
• Constructive steps: diversify, trim outsized positions, de-risk where prudent, and legislate to grow supply—not just engineer the finances.

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