Third Quarter 2024 Review — ft. Aswath Damodaran

Summary

Prof G Markets: Third Quarter 2024 Review ft. Aswath Damodaran

Release Date: October 31, 2024

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Overview

In the latest episode of Prof G Markets, hosted by Scott Galloway and Ed Elson from the Vox Media Podcast Network, the duo delves into the significant events shaping the capital markets in the third quarter of 2024. Featuring an insightful conversation with Professor Aswath Damodaran, renowned for his expertise in corporate finance and valuation, the episode offers a comprehensive analysis of market-moving news, fallen market icons, and strategic investment perspectives.

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1. Opening Banter

The episode kicks off with Scott and Ed sharing a light-hearted conversation about Halloween spending, reflecting on a personal anecdote where Scott attended a Halloween party dressed as a chicken and met a girl dressed as an egg. This playful exchange sets a relaxed tone before transitioning into the core financial discussions.

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2. Market Headlines and Initial Discussion

Scott and Ed tackle several key financial headlines affecting the market:

• California's Tax Incentives for Movie Production

  • News: Governor Gavin Newsom proposes to more than double California’s tax incentives for movie production to $750 million per year, effective summer 2025.

  • Scott's Insight ([05:07]): Scott supports the move, highlighting that states like Canada, Ireland, and Vancouver offer similar incentives. He notes that for every dollar in tax credits, California gains $1.08 in tax revenue, deeming it net neutral. Furthermore, he emphasizes the positive economic impact—each dollar in tax credits generates $8 in wages and $24 in economic activity. Scott appreciates leveraging California's deep talent pool in the entertainment industry to stimulate economic growth.

    Scott ([05:07]): "I think the incentives in California are so caught up in this industry and they don't even need to exceed the tax credits of other municipalities, they just need to match them because the talent pool around Hollywood is so deep."

  • Ed's Perspective ([07:09]): Initially skeptical, Ed expresses concern that subsidizing the Hollywood industry might not be strategic if the sector is on a decline. He questions the long-term viability of investing public funds into what he perceives as a potentially dying industry.

    Ed ([07:09]): "This to me was sort of all of the worst criticisms of the Democratic Party come true."

  • Conclusion: Scott convinces Ed of the tactic's immediate benefits, underscoring the strategic advantage for Los Angeles in maintaining its dominant position in entertainment.

• Boeing's $21 Billion Share Sale

  • News: Boeing raised $21 billion by issuing common stock and convertible shares to boost liquidity and prevent a credit rating downgrade to junk status.

  • Ed's Analysis ([08:05]): Ed criticizes Boeing’s forced share sale, viewing it as a nightmare for shareholders. He highlights that Boeing is selling shares not out of strategic intent but necessity to appease credit rating agencies, potentially diluting shareholder value.

    Ed ([08:05]): "They're selling shares because they have to...from a shareholder perspective, I look at this and this is just a nightmare."

  • Scott's Counterpoint ([10:21]): Scott explains that Boeing’s financial strain, exacerbated by production strikes, necessitated the share sale to maintain debt ratings. He views it as the best of bad choices, allowing Boeing to strengthen its cash position and avert immediate financial crises.

    Scott ([10:21]): "They decided it was worth for shareholders to take the dilution to shore up their liquidity."

• Robinhood's Betting Contracts on Elections

  • News: Robinhood launches betting contracts for the presidential election, allowing U.S. citizens to trade contracts predicting the outcome (e.g., Trump vs. Harris). Following the announcement, Robinhood’s stock surged by 3%, and Donald Trump's media company experienced a 21% rise.

  • Scott's Commentary ([12:16]): Scott likens Robinhood to gambling platforms like FanDuel and DraftKings, suggesting it reinforces Robinhood’s role as a gambling site rather than an investment platform. He raises concerns about the potential lack of seriousness in the betting market's predictions.

    Scott ([12:16]): "Robinhood is not where you go to invest, it's not where you go to learn, it's where you go to gamble."

  • Ed's Insight ([13:15]): Ed references Professor Damodaran’s interview with Kalshi's CEO, indicating a shift in perspective on betting markets. He highlights that 90% of Kalshi’s users are men, potentially skewing betting outcomes towards Trump.

    Ed ([13:15]): "You think about how seriously people have taken these betting markets and you know, Trump's up 60%. ... 90% of the users on the platform are men."

  • Scott's Final Thoughts ([14:20]): Scott anticipates extreme volatility in Donald Trump’s media company stock, comparing its unpredictability to Vegas gambling. He expresses skepticism about the company's long-term viability regardless of election outcomes.

    Scott ([14:20]): "This thing is hilarious. It's now worth more than Twitter."

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3. Interview with Professor Aswath Damodaran

Professor Damodaran provides a deep dive into several "fallen angels" in the market—once-iconic companies struggling in the current economic landscape.

a. Nike's Stagnation and Brand Dependency

• Nike’s Current Position ([20:22]): Damodaran discusses Nike’s challenges under new CEO Elliot Hill, emphasizing that while Nike retains a strong brand, it may no longer achieve double-digit growth. He notes that iconic brand names require continuous nurturing to maintain their competitive edge.

  Professor Damodaran ([20:22]): "I don't think you're going to see double digit growth from Nike for the next decade. But it still has the most recognizable brand name in this business."

• Brand as a Moat ([23:34]): Ed presents a thesis questioning the efficacy of brand strength as a sustainable competitive advantage. Damodaran counters by explaining that brand names need active maintenance and can diminish if the target market evolves or if the brand fails to adapt.

  Professor Damodaran ([23:34]): "Brand names, even though they're long term competitive advantages, need nurturing, need being taken care of."

b. Intel’s Struggles and Potential Recovery

• Intel’s Overreach ([26:41]): Damodaran criticizes Intel for overextending in attempting to compete with TSMC and Nvidia, leading to financial strain. However, he sees potential for recovery, especially leveraging the Inflation Reduction Act, which supports domestic chip manufacturing.

  Professor Damodaran ([26:41]): "I think... there's a pathway back to middle age for Intel. And at less than $20 per share, I thought it was a pretty good bargain as an investment."

c. Boeing’s Deep-Seated Issues

• Boeing’s Credibility Crisis ([26:41]): Unlike Intel, Damodaran views Boeing as in severe trouble due to a tarnished reputation and operational missteps. He expresses skepticism about Boeing’s ability to regain trust, suggesting that the company may even consider selling off its space division.

  Professor Damodaran ([26:41]): "Boeing is in complete survival mode and... the company’s in serious, serious trouble."

d. Estee Lauder and Disney’s Decline

• Disney’s Management Transition ([31:53]): Damodaran uses Disney as a case study for poor management succession. He laments the departure of leaders prepared to fill post-Bob Iger’s tenure, leaving Disney vulnerable amidst a transformed entertainment landscape dominated by streaming disruptions.

  Professor Damodaran ([31:53]): "If you were writing a case study about how not to transition top management, Disney would be the case study."

• Estee Lauder’s Challenges ([35:10]): Focusing briefly on Estee Lauder, Damodaran acknowledges governance issues and a shifting market landscape but admits to having less comprehensive insights compared to Disney.

e. Succession Planning: Internal vs. External Hires

• Strategic Insights ([35:37]): Damodaran emphasizes the importance of aligning leadership changes with the root causes of a company’s troubles. If issues are operational, internal hires who understand the business may be preferable. Conversely, if strategic or narrative shifts are needed, external hires can bring fresh perspectives.

  Professor Damodaran ([35:37]): "If your trouble is with storyline, you've lost your narrative as a company. You have to go outside."

f. Tech Sector Earnings and Trends

• Earnings Expectations ([38:08]): Damodaran anticipates mixed results from major tech earnings reports, noting that while some companies like Meta and Alphabet have lowered expectations, others like Nvidia face high benchmarks that lead to stock volatility despite earnings beats.

  Professor Damodaran ([38:08]): "I think expectations have been lowered for some of the tech companies... It’s easier for them to meet those expectations."

• Cloud Services Dominance ([39:36]): He observes that major tech firms have increasingly significant cloud divisions, which are both highly profitable and potentially antitrust targets due to their dominance.

  Professor Damodaran ([39:36]): "Microsoft... gets about half its revenues from the cloud business. It’s more cloud business than software company now."

g. Election Impact on Markets ([53:37] - [56:55]):

• Market Pricing of Election Outcomes ([54:02]): As the election approaches, Damodaran reflects on how markets seem indifferent to the candidates’ economic plans, suggesting that neither Trump nor Harris is perceived as serious about altering fiscal policies drastically.

  Professor Damodaran ([54:02]): "The markets don’t believe that either presidential candidate is serious about what they're saying on their economic plan."

• Investment Strategy Amid Election Uncertainty ([56:10]): Damodaran advocates for avoiding politically driven investment decisions, emphasizing the difficulty of predicting election outcomes and their direct impact on markets.

  Professor Damodaran ([56:10]): "I prefer to keep it that way. So for better or worse, I've stayed away from making any politicized investment decisions."

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4. Closing Discussion and Final Thoughts

• Scott’s Personal Experience ([55:35] - [58:46]): Scott shares his past mistakes of letting emotions dictate investment decisions post-election, advising listeners to stay the course and avoid trying to game the market based on political outcomes.

  Scott ([55:35]): "I would not try to game the market here... Stay the course and also recognize for your own mental health."

• Professor Damodaran’s Final Advice ([52:35] - [54:02]): Reinforcing his stance, Damodaran reiterates the importance of separating political sentiments from investment strategies to maintain rational and effective portfolio management.

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5. Notable Quotes

1. Scott on California's Tax Incentives:

   "[05:07]... I think the talent pool around Hollywood is so deep."

2. Ed on Boeing’s Share Sale:

   "[08:05]... this is just a nightmare."

3. Professor Damodaran on Brand Names:

   "[23:34]... need nurturing, need being taken care of."

4. Scott on Robinhood’s Gambling Nature:

   "[12:16]... it's where you go to gamble."

5. Professor Damodaran on Disney’s Management Issues:

   "[31:53]... Disney would be the case study."

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Conclusion

The Third Quarter 2024 Review of Prof G Markets offers a nuanced examination of critical market developments, strategic business challenges, and investment philosophies. Through dynamic discussions between Scott, Ed, and Professor Damodaran, listeners gain valuable insights into navigating a complex capitalist landscape, understanding the implications of corporate actions, and maintaining disciplined investment strategies amidst economic and political uncertainties.

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Thank you for tuning into Prof G Markets. For more insightful analyses on the capital markets, financial literacy, and investment strategies, subscribe and follow the Vox Media Podcast Network every Monday and Thursday.

Transcript

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[Scott]

Today'S number $1.8 billion. That's the estimated total amount American adults spent on their Halloween costumes this year. True story. Ed, I went to a Halloween party dressed as a chicken and I met a girl dressed as an egg. And we answered the age old question. The chicken. Ed, you'll get it in about a minute. You look confused.

[Ed]

I'm confused, but I'm seeing. I'm seeing laughter over here, so I assume it's good.

[Scott]

Which comes first, the chicken or the egg?

[Ed]

Ed?

[Scott]

Jesus, do I really have to.

[Ed]

Oh, God.

[Scott]

Okay. All right.

[Ed]

You got to really spell it out for me. I'm slower than I appear.

[Scott]

Ed, what is a good word?

[Ed]

I'm doing very well. Scott. Another day in New York. It's been lovely weather. My sister visited this weekend.

[Scott]

That's nice.

[Ed]

Very nice. Hung out with her. Life is very good.

[Scott]

Did I know you had a sister? I think I did.

[Ed]

I think you did know that.

[Scott]

Does she have kids? I don't care. I'm just asking, but I don't care. Does she have kids?

[Ed]

She does not have kids.

[Scott]

Really?

[Ed]

Any other questions?

[Scott]

I think you'd be a nice uncle. How old is your sister?

[Ed]

She's 28.

[Scott]

That's nice. And where does she live?

[Ed]

She's at business school in Virginia. She's at uva.

[Scott]

She's at Darden.

[Ed]

That's right.

[Scott]

That's an amazing school. And it's the second most beautiful campus in the nation. I would say Duke or UCLA are tied for number one, or Pepperdine, but I'm not sure that really counts. But I'm going to hear it from my February friends anyways. But I have this. I'm glad I was asking about you and we could manage to bring this back to me. I had this image of where I would retire and teach, and I was so stressed out about not making enough money in New York. I thought, that's it. I'm going to leave and I'm just going to go to a college town and teach brand and write books and have a nice life making a reasonable amount of money. I want off this hamster wheel. And Darden was one of the places I was considering. Charlotte. Have you been to Charlottesville? Have you visited her?

[Ed]

I have indeed. It is. It's incredible. Beautiful campus.

[Scott]

It's wonderful. Wonderful. Great school, too. Hard workers.

[Ed]

Princeton campus is nicer, really, but it does not have a good grad program.

[Scott]

Yeah, there's something about, there's something about Princeton that just bothers me. I don't know if it's you or just the reputation there. I don't know what it is. Anyways, enough of that. Get to the headlines, Ed.

[Professor Aswath Demodaran]

Now is the time to buy. I hope you have plenty of the wherewithal.

[Ed]

California Governor Gavin Newsom wants to more than double the state's tax incentives for movie production to $750 million per year. If approved, the increased incentives would take effect in the summer of 2025. Boeing raised $21 billion by selling common stock and convertible shares. The airplane manufacturer was looking to boost liquidity and prevent its credit rating from being downgraded to junk. Robinhood has launched betting contracts for the presidential election. Users will now be able to trade a Trump or Harris contract as long as they are a U.S. citizen. The stock rose 3% on that news. And finally, shares of Donald Trump's media company rose 21% on Monday alone as prediction markets favored him to win the presidential election. Trading was then halted for volatility multiple times on Tuesday, with nearly 16 million shares exchanged in the first 10 minutes of a highly volatile session. Scott, your thoughts, starting with Gavin Newsom's decision to double tax incentives for Hollywood.

[Scott]

Given the reality of the situation that everyone from Canada to Ireland to Albuquerque to Atlanta to Vancouver are offering big incentives for film production. This was a good move and it was a needed move and it was overdue. And the analysis of this shows that for every dollar in tax credits that California gives to the motion picture industry or the TV industry, they get $1.08 back in tax revenues. So it's net neutral. It's not a net positive. You do actually at someday have to charge corporations for doing business and you do need tax revenue from them. And when it's. We couldn't have sectors that are just net neutral in taxes otherwise we couldn't fund the navy or the parks. But this is a really good idea given the situation, given that LA has really struggled with production the last couple years. By some estimates it's down 30 or 40%. In addition to it being net neutral in terms of tax revenue, every dollar of incremental tax credits results in $8 of incremental wages and $24 in incremental economic activity. So it really is stimulus that works. Also, I just think the ident in California is so caught up in this industry and they don't even need to exceed the tax credits of other municipalities, they just need to match them because the talent pool around Hollywood is so deep. And that is, if you're a senior that wants to go pursue, you're the star of your drama club and you want to go pursue your dreams in Hollywood, if you know how to make sets, if you're good with cgi, that talent, their first instinct is to get on a plane and come to la. So LA just has, I would argue, the greatest concentration of TV and theatrical talent ever assembled. So to not take advantage of that and also create sort of the zeitgeist and economic growth in la, which has struggled in this industry the last couple years, would be not leaning into your strengths as, you know, as a metro. So I'm a big fan of this. I think it was a really good idea. What are your thoughts?

[Ed]

Well, that was extremely compelling because I looked at this and I just hated it. This to me was sort of all of the worst criticisms of the Democratic Party come true. I mean, just the idea of California using a government funded program to subsidize the production of Hollywood movies. To me that sentence could be basically like a billboard for the Republican party on just how woke and dumb the Democratic Party has become. But the case you just made is actually quite compelling. The only pushback I would give is that they're subsidizing an industry which to your point is important and systemic to the culture, but it is a dying industry. And I just wonder if it makes sense from a public sector strategic perspective to be trying to subsidize an industry that ultimately over the long term probably is on its last legs.

[Scott]

I think the word dying is a little bit overdone because if you look at content spending across, across film and TV, it's actually up 2% this year. What's happened is it's been globalized. So the auto industry, auto sales didn't go down in the 80s, they just went down amongst American cars because they were making a shitty product and people started buying Japanese cars. And Netflix is actually globalizing itself and sending content offshore. And what we're talking about here is it's real money. It's going, I think from 350 million to 750. That's not big in an economy that's the fifth biggest economy in the world. And to your point, I hate this race to the bottom that are tax subsidies. And the result is corporations are paying less as a percentage of GDP in their taxes since 1938. It's the lowest level since 1938. But at the same time, a lot of very Republican states, the only way they get Toyota to go to wherever it was, Alabama or wherever they are in the south is with subsidies. And these governments have to do the math and go, are the subsidies worth it in terms of economic growth?

[Ed]

You've convinced me. I had a sort of red pilled reactionary take to the headline, but you've convinced me. This actually makes sense. We should talk about Boeing and this $21 billion share sale. We talk a lot about how you never want to be a forced seller in any transaction, in any negotiation. This is essentially a forced sale. They're not doing this for any long term strategic reason. They're doing it for one reason and one reason alone. And that is if they don't, the ratings agencies like Moody's and S and P Global, et cetera, those ratings agencies will downgrade their credit rating from BBB minus to double B, which is the highest rung in junk status. So Boeing really doesn't want to be a junk bond. It's very bad for their reputation. More importantly, it means they're going to have to pay significantly more in interest payments. So this is a no go. So what are they doing? They are selling shares to basically alleviate that $60 billion pile of debt on their balance sheet and to make the ratings agencies happier. So from a shareholder perspective, I look at this and this is just a nightmare. They're not Selling shares because they want to, they're selling shares because they have to. What is your view?

[Scott]

The reality is this is a company that's not doing well and it's financially strained for a number of reasons, most recently the strike, so they're not producing planes. They had enough debt where essentially the market was starting to get jittery and was saying given the decline in your business and your debt load, your debt is about to become more expensive. So in order to give the debt holders some certainty such that the interest rate didn't go up, they decided that the cheapest source of liquidity was to issue more stock and maintain, you know, keep their bonds out of junk rating. So this was just a straight financial reason. There's no, there's no getting around it. They wouldn't have to do this if their business was booming. But they decided it was worth for shareholders to take the dilution to shore up their liquidity such that their debtors didn't start massively increasing interest rate, which would again strain their cash flow. So they had to make a bad choice between bad choices. And this was probably the least bad. And shares actually went up because the market said, okay, this company needed liquidity, it got the secondary or the preferred or the share sale done and now they have a much stronger cash position on their balance sheet to endure whatever bullshit happens or if the union rejects the next offer and their debt, their debt remains out of junk territory. So this was the best of a series of bad decisions is the way I would think about it.

[Ed]

Yeah, absolutely. But certainly some blame on management's part for even being in that situation in the first place. The last thing you want is to be given a series of bad choices and have to choose the least bad one. Your reactions to Robinhood getting into the betting markets. We've talked about Kalshi and Poly Market and predict it. All of these events, contract markets that allow you to bet on various things but most recently they allow you to bet on the presidential election. Now Robinhood's getting involved. What's your view on this?

[Scott]

Like Robinhood is not where you go to invest, it's not where you go to learn, it's where you go to gamble. And that's fine, you're allowed to. There's FanDuel, there's DraftKings, they're a gambling site and there's no reason they shouldn't be in this. I think this is sort of a non story. I think the two founders of Mendacious Fox, but I don't see any reason why they shouldn't be in it. I mean, it's like a tobacco company says. I know, let's make our logo even fucking cuter. Some more 18 year olds who want to smoke. I don't know. What do you think?

[Ed]

I think of it as a little less mendacious, I think, than you describe it. Having said that, I've just interviewed the CEO of Kalshi who sort of brought me round on that side.

[Scott]

Brought you round that he's a mendacious person?

[Ed]

No to believing that actually it's not so bad. And so you can check out that interview when it comes out in a few days.

[Scott]

No, it makes sense to take grandma's money she gave you for junior college and bet on whether you think Trump or Harris is going to win. That can't end badly. That's just a really good idea. Really good idea.

[Ed]

That's smart. Well, let me just throw out one little interesting new piece of data. I mentioned earlier that people say the betting markets are more accurate, they're more truthful because people have money on the line, they're better than polling. And you might remember my thesis was actually the likelihood, given the fact that 60% of gamblers and 60% of stock market participants are men. The likelihood is that most of the people betting on this election and betting on these platforms are likely men, which likely skews it towards Trump. So Kalshi actually released their demographic data. How many of the what percentage of the platform do you think are men?

[Scott]

I would think that it's 80 to 90, but you're going to tell me it's lower than that?

[Ed]

No, no, no, it's, it's 90%.

[Scott]

90.

[Ed]

90% of the users on the platform are men. So you think about how seriously people have taken these betting markets and you know, Trump's up 60%. The one thing you do have to remember is that 9 out of 10 people betting on that outcome are indeed men.

[Scott]

Well, the Kalshi data, if you type in Kalshi presidential election, it has Trump at 62% and her at 38.

[Ed]

That's right.

[Scott]

I don't know how that works though. Does that mean if you bet a buck, you get a buck 50 back? I don't know how that works. I don't know how you actually bet on these things.

[Ed]

Well, tune into first time founders on Sunday to find out our final headline. Donald Trump media rose 21% on Monday. Your thoughts?

[Scott]

This thing is hilarious. It's now worth more than Twitter. You want to talk about Vegas? I mean, if you look at the options market. If you wanted to buy a call way out of the money at like 65, that expires this Friday, so only, what, three days left from here. And let's pick a call at say, I don't know, let's say way out of the money. Like it's 65 bucks you have to pay, get this, three bucks. So, I mean, this thing is just so volatile. The options market is telling you that this thing is going to go to either 70 or 30. And what it would be really interesting is if on Wednesday morning I wake up in London and I put on the New Radicals. You get what you give, and I start dancing around, which will have meant that Harris. It looks like Harris has won. That's going be really interesting to see what happen. Well, either way, it's going to be really interesting to see what happens at this stock. But you could see this stock, assuming it holds where it is at 54 bucks, if she wins on Wednesday, I can't imagine that thing's not in single digits within 48 hours. I mean, I just saw an article today saying if he doesn't win, he may, if not go to jail, come very close to going to jail. This is a company losing hundreds of millions of dollars on 2 or 3 million in revenue. What, what is the home or the outcome for this company if he's not president? It's, it's, it's worth zero.

[Ed]

I don't even understand what the home or the outcome for the company is if he does win.

[Scott]

Well, the assumption is that I think that he's a kleptocrat and that he will figure out a way to mandate government contracts or funnel revenue to this company the same way he funneled revenue to his hotels. The next seven days, eight days. This is going to be the most. It's, it's. You're going to see trading halted here over and over. You're going to see this thing just go absolutely insane. And there's going to be a lot of money made and lost in the options on this thing. But it's this kind of. I'm kind of ready for this company to go away. This feels to me like the Playboy brand. I would really like. I would really like to have a dual execution of both of these brands and say, okay, it's time to just stop talking about these companies. They're not real companies.

[Ed]

We'll be right back after the break for our conversation with Professor Aswath Dumodrin. If you're enjoying the show so far, Be sure to give Profg Markets a follow wherever you get your podcasts.

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[Ed]

Welcome back. Here's our conversation with Professor Aswath Demodaran the Kirchner family chair in Finance Education and professor of finance at NYU Stern School of Business. Professor Demoder, and thank you very much for joining us once again on profit markets.

[Professor Aswath Demodaran]

Thank you for having me.

[Ed]

So last time we talked and we had you on for our quarterly review, we were discussing some of these fallen heroes in the market. So companies like Nike and Starbucks and intel, these once iconic companies that have been struggling recently. And I'd like to just get your updated view on some of these companies as there have been some very interesting new developments. And we'll start with Nike, who recently hired this new CEO, Elliot Hill. He's been a longtime employee of the firm. Give us your headline thoughts on Nike at the moment, their struggles and the challenges ahead for Mr. Hill.

[Professor Aswath Demodaran]

I mean, part of the problem Nike faces is, I mean, they've had a long run as an apparel slash shoe company with a brand name. Brand names in this business tend to fade quickly. I mean, you look at great brand names, they're here today, gone tomorrow. Nike's had a long run. In fact, I read, I read the book Shoe Dog as a pre I wrote a piece on Nike and I read the book Shoe Dog to kind of prepare myself because it kind of talks about the process by which Nike got to where it got and the accidental choices it made, including it's the Swoosh and just do it, how they were chosen without a great deal of thought. I mean, I think they paid $35 to design the swoosh, you know, so it's an amazing set of coincidences that I built one of the great brand names of the world. But it's a brand name that's been built around people, right? That choice of signing Michael Jordan in 1984 when he was not a superstar yet, but riding that wave of NBA Michael Jordan fandom to success, that is always a tricky, tricky place to be because you got to find new celebrities and celebrities are human beings. So you live and die with those human foibles that come with the sign. So I think that, you know, when Nike hit 72, which was the, I think pretty close to its low, I said, look, the market's building in the expectation that Nike's best days are done, that growth is not coming back, that margins are going to continue to slide. And I agree with part of that statement. I don't think you're going to see double digit growth from Nike for the next decade. But it still has the most recognizable brand name in this business. It still has great margins even on its worst days. It's a very good company, but it's not going to be a great growth company anymore.

[Ed]

I just want to put forward a thesis that we've talked about on this podcast. We hear a lot about this term brand as moat in business. This idea that if you have a strong brand, that's one of the best protections against competition. But, you know, I look at all of these iconic brands, especially Nike, that have, you know, fallen out of favor, and I'm starting to believe that maybe that phrase is outdated. Because what it looks like is happening is these companies are becoming too reliant on their brand. They're sort of resting on their laurels and they're convincing themselves that the brand is the moat. And then as a result, maybe they get lazy and the brand sort of depletes in value. So I'd love to get your reaction to that thesis, especially in relation to Nike, that perhaps brand as moat in 2024 is maybe less true than it used to be.

[Professor Aswath Demodaran]

You know, brand names, you know, even though they're long term competitive advantages, need nurturing, need being taken care of. I mean, remember Quaker Oats? And quickly, that brand name, one of the most recognized names in grocery stores, kind of faded away because they didn't take care of the brand name. The other reason, though, is nothing to do with laziness and not taking care of it. Your brand name is recognized by a segment of the population. If your market is aging, your brand name by its very nature is going to become less valuable over time. Kraft, Heinz, I mean, it's not that they were lazy, it's that people don't particularly care for Kraft cheese. And there's 57 types of ketchup if they're 25 or 30 years old. You've lost a large segment of the population because your brand has aged. So sometimes it's neglecting your brand name, sometimes it's your brand name aging. And as it ages, your market gets smaller. And sometimes it's that the world has moved on, that what used to be a valuable brand name no longer works. I mean, I take the automobile business. If you think about the great brand names of the 20th century, none of them has been successful in the electric car business. None of them. So maybe what made you successful in a business can become actually a problem as the business itself changes. So lots of different reasons brand names fade. But if you look at brand name as a standalone competitive advantage, it remains one of the strongest and longest lasting competitive advantages a company can have.

[Ed]

It sounds like perhaps one of the things you think Elliot Hill should be going after is young people. Would you say that would be sort of the number one on the agenda for this new plan forward for Nike.

[Professor Aswath Demodaran]

While taking care of the one thing you cannot do is go after a new market and forget about your existing market. Remember the gap in the 1990s decided to go young and ignore the fact that their core market was, you know, 35 to 40 year olds who walked in requiring a khaki and just another color shirt. So they went young and in the process they forgot to take care of the core market. So while he's going after the young market, he's got to make sure he's not going overboard. It's one thing for an on young company going after niche market to go after the young. It's another thing for Nike, the largest company in this space, to go after the young market without in some way risking their core market.

[Scott]

So Aswath, always good to see you. When I got out of business school we love this topic of fallen angels. The best job you could get in 1992 in the Bay Area was to go to work for intel. And it's 2021 was worth three times more than Nvidia. Now Nvidia is worth 33 times what intel is. Jensen Huang, the CEO of Nvidia is worth more than Intel. That to me I wonder if it's been oversold because I do think there are some moats there around ip, the manufacturing facilities. And then the other one where I would also say it's a great American icon that has fallen really far is Boeing. And I wonder if that's been oversold given that it's a duopoly. Thoughts on intel and Boeing?

[Professor Aswath Demodaran]

Let me start with Intel. I mean I think it, you know, again, intel was one of the companies I did write about a few weeks ago. I think the problem for intel is they were at the top for so long that their story is we're the biggest, we're the best. And when that slipped, they wanted to go back to the top. I mean if you think about what they've done over the last 10 years, it's not that they haven't tried to do the things that would make them successful. I think they've tried too hard. Tried too hard in what sense? They tried to out tsmc. TSMC with the intel foundry, huge investments in manufacturing chips, saying we too can be like tsmc. They've invested, I think after Nvidia or perhaps even more than Nvidia, they've thrown in billions of dollars into developing the next AI chips because they're convinced that they can out Nvidia. Nvidia. And I think in the process they've overreached. I call it Me too ism on steroids because that's basically what intel has done for the last five years is me too. I can do that. And I can do it five times more expensively than you can now. I remember going into intel six or seven years ago. I went to their offices and I was talking to their. You know, they asked me to come in and speak to their as a general audience. And what I noticed about intel as a company was the absence of energy. You don't get that sense of excitement and wasn't there anymore. And it's tough to be in the business that intel is in without that driving the choices. I do think though, that it's been oversold. I think especially when it dropped below $20 per share, you are effectively assuming that intel would shrink over time and its margins would go away. Intel has a couple of advantages still that can work in its favor. One is the inflation reduction act, as you know, put as a priority chips made in the U.S. tSMC has built a factory in the U.S. but intel is supremely well positioned to take advantage of the subsidies that come out of that. So if intel can find its feet on the foundry business, there's a way back. And I think that as long as they don't try too hard and accept the fact that they will not dominate AI, that battle's lost. Nvidia will, but they have a niche portion of the AI business they can go after. I think there's a pathway back to middle age. Not great growth, but middle age for Intel. And at less than $20 per share, I thought it was a pretty good bargain as an investment. I own intel now, so I've got to be quite open about that. I did it after I wrote the piece and I looked at what would happen if they became a 3% growth company and the margins slipped by 3 or 4% and there were $28 per share. With those assumptions built in, I can live with those assumptions. I think the odds are in fact in your favor. And Intel. Boeing, though, is an entirely different story. I mean, I've never seen a company blow up its reputation as thoroughly and as completely as Boeing has done over the last 20 years. I mean, it's one of the great engineering companies in the world. I mean, a company that was, you know, people went to because it had superb, superb engineering and technology knowledge, trusted in many dimensions the only reason Boeing is afloat is because it's in a duopoly. I mean, that's the reality is this company has so thoroughly trashed its credibility in markets that in any other market we'd be talking about rap winding up the story and selling the assets to others. I do think they're thinking about selling their space division now. And that's the first phase in a company saying, we're in trouble, we're going to sell off our crown jewels because we have to survive. They're in complete survival mode and, I don't know, an easy pathway back to credibility because once people get the perception that you cannot be trusted, that your products are not safe, which for an aircraft manufacturer is diabolically dangerous, it's very difficult to find a pathway back. So Boeing, I would not buy at any price simply because I, you know, I think there are too many things that can go wrong here that can cause the company, if not to go bankrupt, at least to be taken into receivership by somebody that might maintain the assets and run it. But the company's in serious, serious trouble.

[Scott]

So two other fallen angels that have been kind of the leaders in their category held up as icons of management. First, Estee Lauder, which made some of the best acquisitions in the aughts with Mac, consistent earnings growth, great performer, really strong in China. And then Disney, which was always seen as this talk about moats between the intellectual property, the parks, diversified business, kind of owned family and imagination. Just these incredible brand associations. Estee lauder is off 38% year to date. It's been cut in half over the last five years. Disney is up 6% year to date, but is off 27% in the last five years. And I think it's trading kind of where it was about 10 years ago. Estee Lauder and Disney.

[Professor Aswath Demodaran]

I'll take the Disney part first, because I think Disney is. If you were writing a case study about how not to transition top management, Disney would be the case study, I think, you know, because let's face it, 2012 is when Bob Iger went to the board and said, you know, I'm ready to leave. I mean, I actually wrote a very complimentary piece about him then saying this is the way top CEOs should behave, is they've made themselves dispensable. And he said, and I blame the board of directors at Disney, which I think has to rank up there among the 10 worst boards of directors in terms of corporate governance. They convinced Bob Iger that the company could not make it without Him. I mean, in my classroom, I use the example of Julius Caesar in the Shakespearean version, where he says, where they try to crown him king, he says, no, no, I'm not the king. And the second time they try, the third time around, he says, okay, I'm the king. And in a sense, Iger initially resisted, but they were so persistent that finally he said, you're right. Right. This company cannot make it without me. When he came back in 2015, though, he set in motion an entire set of events. And Disney's still trying to live down that second layer of management that was waiting to move up. Said, we're not waiting around. Think about Tom Stag. Basically go down and look at the people who are supposed to step in. They all left and moved on, which left Disney with an empty cupboard in terms of top management skills. So, of course, Bob Iger became indispensable because there was nobody else left. And I was surprised when he left in 2020, to be quite honest, because there was really nobody ready to step in. But I think Disney is facing a problem that's out of their control as well. The entertainment business is broken. I mean, I haven't talked to a single person in entertainment who feels secure about what the future will deliver. We know who broke it. Netflix did with the streaming model. But even Netflix hasn't benefited from breaking the business. And that's, you know, one of the things I often say is disruption is easy, but making money off disruption is really difficult at this point. The one thing we know is nobody in the entertainment business is healthy. Healthy in the sense of you can look at the company and say, this company has a business model that's going to deliver sustained profits for the long term. Netflix can't do it. Disney cannot do it. Warner cannot do it. Paramount definitely cannot do it. But there's consolidation coming in this business. You're going to see the business consolidate. Estee Lauder, I have less strong feelings about. It's a business that I'm not that comfortable. You know, I don't quite understand the movements, the fads, the fashions that drive that business. I mean, I think that too, there might be a governance issue that we've got to deal with sooner rather than later of, you know, is with change is needed, is it likely to come with the people running the business? I'm not sure it is. And I think almost both these companies, I think, reflect the fact that the underlying businesses they were in for a long time were predictable businesses that they learned how to operate in. Those businesses have Changed. These companies are struggling with an entirely new business that they're in and how to make their way to success on both.

[Ed]

Just a sort of general question about succession planning while we're on the subject asworthy philosophy on hiring insiders versus outsiders. So Estee Lauder, they have just said they are going to hire or they're going to promote an internal executive to CEO. We saw the same thing at Nike. Starbucks brought in the Chipotle guy. Disney is sort of balancing that question. What's your view on internal versus external hires?

[Professor Aswath Demodaran]

I think the question is why are you in trouble? If you're in trouble because of mechanics, logistics, something that's inside the business, then I think it makes sense to go inside the business. You want to bring somebody who understands. If your trouble is with storyline, you've lost your narrative as a company. You have to go outside. You have to bring in fresh thinking into the business. I mean I'll, you know, my views on Starbucks are. It's, it's. The Starbucks story is broken. It's broken because the original Starbucks story was to bring the European coffee shop experience to the us a country which never had that experience. And it succeeded beyond its wildest imagination. Coffee shops where people came and hung out three, four, five hours a day, they brought the laptops. That was the Starbucks story. And I hate to bring Covid into it because we blame Covid for everything. But Covid in a sense set the framework for the Starbucks story breaking. Why? Because it created the online ordering system. And today when I walk into a Starbucks, I notice 25 people standing around picking up their online orders and three people forlornly sitting in the coffee shop drinking their coffee. The coffee shop experience is broken. And it's also created logistical challenges because at 8:30 in the morning, whether you live in LA or New York or any big city, you walk into a Starbucks, there are like 100 online orders that come in at the same time and the barista just can't handle them. You don't have the old mechanism of the line slowing you down. It's created both a story and a logistical problem. The Chipotle guy might be able to solve the logistical problem, but I don't know whether he has the capacity to solve the story problem. And that's going to be the test.

[Ed]

I went into a Starbucks the other day and I tried to order a coffee and they said, oh, you can only order on your phone, sorry. Just turned away and went back into the kitchen. It's unbelievable.

[Professor Aswath Demodaran]

And maybe there's a different storyline. Maybe we need to shut down all these expensive leaseholds of big stores and just have kiosks. Maybe that's a better, that's a different. I'm not saying it's, it's, it is what they will do.

[Ed]

More of an Uber eats story.

[Professor Aswath Demodaran]

Exactly right. In a sense, that's what it's become. And for better or worse, that's the reality that a new CEO of Starbucks will have to face.

[Ed]

Absolutely. I'm just going to shift us over to tech. We've got some big tech earnings rolling out over the next few days. Is there anything you're paying particular attention to in these earnings reports?

[Professor Aswath Demodaran]

I'm looking for patterns. If, if you see all of them underperform, then that there's a signal here that you. My guess is you're going to see what you've seen all year, which is, you know, you take the mag seven, four will beat their earnings, three will fall. It's almost like if you have all seven in your portfolio like I do, disappointment on one are offset by gains on the other. One of these days that's going to end. They're all going to go down at the same time, but that's going to happen because a market correct occurs which is large, not what you're seeing. So I expect the usual pattern. I do think that expectations have been lowered for some of the tech companies, in particular for Meta and Alphabet. The expectations are set lower than they used to be. I think it's going to be easier for them to meet those expectations. Nvidia's last earnings report was a crapshoot. I mean, their expectations were set so high that even though they beat their estimate by 5%, the stock of course took a beating. It'll be interesting to see if people have adjusted expectations to reflect the new reality or not. Because you're seeing the expectations game and I'm watching the expectations game a lot more than the actual game.

[Ed]

Right. It seems like a lot of these earnings, I mean we'll see Microsoft, Alphabet, Amazon, Meta. A lot of the story there is is interestingly actually about Nvidia because their Capex is basically Nvidia's top line.

[Professor Aswath Demodaran]

That's a spending for those companies and revenues. And at the same time the server businesses for all these companies are going gangbusters because the same AI zeal that's causing them to spend the money on these AI chips is also causing demand for cloud. So look at Microsoft today and I was looking at it last week, week it gets about half its revenues from the cloud business. It's more cloud business than software company now. I never thought I would see that day 10 years ago, but it's astounding how big it is and how incredibly profitable that business is. In fact, if you're an antitrust person, you should probably go after the cloud business in terms of dominance, not the businesses you're going after. Smartphones, advertising, because that's really where I think you see the dominance play out.

[Ed]

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[Ed]

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We're back with Profg Markets.

[Scott]

So let's talk about Tesla. The most recent earnings call, you saw a substantial pop in the stock price. I think it was up 21% growth, up 6%, but the revenue mix was an improvement. Some of their higher margin categories grew faster than the core business, but it still seems to be, I call it kind of a hybrid stock. It's a company with real cash flows, but it also feels like it has some memeish qualities to it. Your thoughts on the most recent Tesla earnings?

[Professor Aswath Demodaran]

As a Tesla owner, I like the earnings because I do think the jump I saw in the price a Tesla vehicle owner or a Tesla or Tesla stock owner, right?

[Ed]

Okay.

[Professor Aswath Demodaran]

I own a Honda Civic, a 2010 Honda Civic that basically nobody would steal Deal. But as a Tesla stockholder, it was good news for me. But I did think it was out of proportion to the good news in the report. It almost was a relief rally because we've had so many bad surprises with Tesla earnings reports that people heaved a sigh of relief, saying thank you for not seeing the margins drop even more and reporting more bad news because that's what people were. So it's almost like the consensus numbers have become a side story. Now the market seems to have its own set of expectations for companies that if they don't meet or do meet, reflecting the price. Now, I, I do think that this, this automated driving thing is still very much in the mix and I'm not sure that's a distraction or an addendum to the story, to be quite honest. I think that, you know, that that took a lot of the publicity around, you know, around what happened around the last earnings report. But I do think that the relief was, hey, you know, at least they're going back to the products and services that deliver the highest margins. That's good news. They're not throwing a ton of money after these businesses they're chasing. But I think this is going to be one good earnings report followed by a second earnings report where you get surprised again. I mean, with Tesla, you never can rest easy on what you're sitting on. So I'm going to go earnings report to earnings report right now. I'm feeling okay. Okay. But who knows what the next earnings report will deliver and what new businesses they will claim to be in before the next earnings report.

[Ed]

The we robot event, by most consensus, it was kind of a disaster. You know, it was sort of all talk, no action is what I would say. But the thing that really stuck out to me was the fact that the AI humanoid robots, which are supposed to be the future, it's what's fueling this huge valuation of the company. They were being controlled by people, they were being voiced by people, they were basically being puppeted by people. I'd love to get your view on that. And how bad is that? Are we bordering on fraud here?

[Professor Aswath Demodaran]

I'm not going to go that far, but I think we're overpromising in general with AI products and services. I think there's a lot of overpromising going along of these great new devices which will not need any. As you pointed out, many of these AI products and services require almost as many human beings behind them as they claim to replace. And that's really going to be the test is whether AI mean, somebody described AI. The difference between AI and machine learning is the difference between stochastic and deterministic. Now, machine learning is basically deterministic. It's rule driven and principle driven. What makes AI different and perhaps better than machine learning is it's stochastic. It adjusts in the moment based on the data it has and gives you. But we don't know how well it does. I mean, that's, I think, still an unknown. The AI advocates claim it'll get a better, that AI beings are going to be sentient in some sense and Behave more like human beings, but I don't think we've seen any evidence of that happening yet. Maybe it will, maybe it will not. But I think that you're right. What you saw in the Robot Dynamics was he's saying, this isn't that impressive. This isn't going to change the world. But it's still early, so I'm going to be. I'm leaving the door open. But I think a lot. I mean, it's not. And it's not just Tesla across the board. I think the product and service part of AI. I'm hearing a lot of promises, but I'm not seeing much in terms of delivery.

[Scott]

What are your thoughts on Uber and potentially their vertical expansion into travel with a potential acquisition of Expedia?

[Professor Aswath Demodaran]

To me, big acquisitions are the death knells for great companies. I mean, I know I just don't like them. I don't like them because you pay a premium on the market price and you got to deliver on that market price. So from a strategic standpoint, from a marketing standpoint, you might say this is great news. But the price they'll have to pay to get it, I don't think it's worth it. And that's my bias playing out. I do not like acquiring large public companies as part of my growth plan because historically, historically it's almost never delivered enough returns to justify it. I'll make a prediction. If they do go for the Expedia acquisition, their stock price will drop and it'll drop pretty substantially in the announcement of the acquisition because I think market share, that same skepticism about growth through big acquisitions. I'd much rather Uber focus on smaller acquisitions, perhaps with private businesses that add to their platform, add to their technology and get them there. I'm not sure buying Expedia is the way to get there.

[Ed]

I just want to go back to Google, one of the big tech companies. There's been talk from the FTC about breaking up Google. The courts have of course, declared them a monopoly and we're entering into the remedy phase. You believe a breakup is not the right remedy. Why are you against a breakup of Google? And what kinds of remedies do you think would be more appropriate in your view?

[Professor Aswath Demodaran]

Let's talk about the companies that have been broken up successfully and why it worked. Standard Oil, easy to break up because it was geographic. You know, basically you broke it up into 36 different companies geographically. ATT again, regional Bells and long distance. Microsoft in 2000, close to a breakup. They never pulled it off, but they said Office on one side, Windows and browsers on the other. I'm not sure where the breakup lines would be in Alphabet. It, you know, because. Because Alphabet's business is not a platform, it's online advertising. It has multiple platforms and being in the ecosystem increases their advertising revenues. I think when I look at Alphabet, the two businesses that could potentially be broken up are YouTube subscriptions, because YouTube, you could argue the subscription model doesn't have to be. And the cloud business, YouTube subscriptions, would they survive as a standalone business? I'm not sure they could because I think it's still very heavily subsidized. But the advertising business, in terms of how much it costs them to maintain the platform and the cloud business, even if you're able to separate it out, what advantage or benefit do you get as a Justice Department, it doesn't take away their dominance in the core business. I mean, if the Department of Justice is worried, is worried because Google controls so much of online advertising that so much flows through that search box, it's only very difficult to figure out a way to break that because that's it's the natural economic of the business. I don't like it, but the consolidation that you see in online advertising is reflective of the networking benefits that you can't make go away through, you know, Justice Department actions. So I don't think it's going to be effective. It's not that I like Alphabet as a company or I like their management, it's just that I don't think it'll deliver what the Department of Justice wants to deliver, which is less dominance from the search box. I think that's still going to remain.

[Scott]

A couple years ago, aswath, you essentially said meta distinctive, the how much badly had been beaten up because of this hallucination around headsets, the massive investment they made there. You said, look, this is just a cash volcano that's been oversold. When you look at a lot, some of these fallen angels and these icons that are trading at near 10 year lows, is there any sector or specific companies that stand out to you as being dramatically oversold?

[Professor Aswath Demodaran]

If I look across sectors, I think I would be looking at entertainment, maybe apparel, because there's a shakeup happening. And perhaps in the shakeup there are companies that are falling off the cliff which don't deserve to because it's being shaken up. So right now nothing catches my eye as being incredibly cheap in terms of cash flow. But I think that as I said, buying the, these selectively buying these companies which have dropped 40 or 50% might actually be a pathway. In fact, the last four companies I bought have all been middle aged or declining companies where the market price has dropped much more than I think it should. So that's where I would look if I were an investor, is look at companies that are down, companies which had glorious paths, don't just jump into them and ask yourself, is there a pathway back for these companies? And I think there is for intel and Starbucks if they can find that pathway.

[Ed]

At the beginning of the year, I asked you, professor de Modern, what you were most focused on in the public markets as an investor in 2024 and your answer was the election. We are now days away. The markets appear to be pricing in a Trump win win. I'd love to know what is just generally on your mind right now, particularly as an investor as we approach November 5th.

[Professor Aswath Demodaran]

You know what? Sometimes when the data comes in, you have to reassess your thinking. The more I look at what markets are doing, the more I'm getting the impression the markets don't believe that either presidential candidate is serious about what they're saying on their planet. Because if they were, you'd see much bigger contortions in the market. You might get a collective market expectation that Trump will win. But if you look at the sectors that would be hurt by, let's say, a tariff of 200%, you're not seeing that. Similarly, you can look at the companies that would benefit from Harris win and you're not seeing those companies go up. So it's almost like the market saying these people are not serious about the economic plans. There's a lot of posturing going on. On, but the posturing. You might as well just go back and make a collective judgment on who's going to win. And right now tax rates are going to go down under Trump will push up the pricing a little bit more. But I think it's, you know, we'll see in hindsight whether that's true or whether this is a dangerous thing to do. But that's my impression of what markets have done this year. They've been remarkably sanguine as both sides have put out their economic plans about how those economic plans will play out in revenues, earnings, cash flows and market prices.

[Ed]

Are you thinking about the election in terms of your own investing strategy? Do you have any politically based theses that you're investing towards? Are you trying to kind of compartmentalize what's happening in politics?

[Professor Aswath Demodaran]

I tried to avoid politically based investing because I'm a terrible political prognosticator. So I've learned to avoid doing things where I'm I don't have any competitive advantage. So I and that's and it's one reason why I've never I underinvest in Chinese companies because I've talked about how China is part of every Chinese company's story. I don't like mixing my politics with my investing, and I prefer to keep it that way. So for better or worse, I've stayed away from making any better.

[Ed]

Professor demodrin is the Ko Family Chair in Finance Education and Professor of Finance at NYU Stern School of Business, where he teaches corporate finance and valuation. As always, fascinating and a pleasure. Thank you so much for joining us.

[Professor Aswath Demodaran]

Thank you, Ed Thanks. Thank you, Scott.

[Ed]

Algebra of Wealth SCOTT Professor De Modern said he does not like to mix his politics with his investing. We're a few days away from the election. It feels harder than ever to keep those two things separate. What would your advice be to listeners who are probably anxious about this election and what it could mean for their money?

[Scott]

So my advice would be to do what professor demodren says, not what Prof. G did. And that is what is likely to happen regardless of who wins, is that we're going to have more intransigence. And some people see that as a good thing, some people see it as a bad thing. And that is any big sweeping changes likely aren't going to happen. And so the notion that you should try and figure out a we don't know who's going to win and then try and game like which companies will do well or poorly based on their victory is just not a good idea. And I have personal experience here. In 2016 when Trump won, I had some experience with Trump affiliated companies and I thought, these people are fucking village idiots. They were some of the worst business people I had ever encountered in business. And I thought, okay, this guy's now running the country. That is really bad news. And I think a week after the election, I sold most, if not all of my stocks. I was convinced the market was going to crash. The market ripped year because of tax cuts and other things and the fact that I took a tax hit on the sales and then had to buy back in one of the dumbest investment decisions I've made. And it's a lesson, and that is your emotions are your enemy. I can't stand the catastrophizing on both sides. Hardcore supporters on both sides have each decided that if the other candidate wins, it's the end of America. That lacks historical context, text, and it doesn't appreciate or recognize how enduring the American experiment is. And also I think that's true of the markets. I would not try to game the market here. I would not try to make any sort of predictions about what impact it's going to have on your stocks or on your investments. So the bottom line is stay the course and also recognize for your own mental health. Whatever happens here, America will endure.

[Ed]

This episode was produced by Claire Miller and engineered by Benjamin Spencer. Our associate producer is Alison Weiss. Mia Silverio is our research lead, Jessica Lang is our research associate, Drew Burroughs is our technical director, and Catherine Dillon is our executive producer. Thank you for listening to Profit Markets from the Vox Media Podcast network. If you liked what you heard, give us a follow and join us for a fresh take on markets on Monday.

[Scott]

You got the music in you?

[Ed]

Don't let go?

[Scott]

You got the music in you?

[Professor Aswath Demodaran]

One dance left this world is gonna flow through?

[Scott]

Don't give up you got a reason to live? Can't forget we only get what we.