Prof G Markets — “What’s the Right Investment Strategy for 2026?”

Host: Scott Galloway and Ed Elson | Vox Media Podcast Network

Date: December 15, 2025

Episode Overview

This episode dives into the key question facing investors as 2026 approaches: What is the right investment strategy in light of volatile markets, persistent worries around an AI-driven bubble, high concentration of gains in a handful of tech stocks, and political influence in economic policy? Host Scott Galloway and co-host Ed Elson, along with clips from recent guests, break down opposing viewpoints, grapple with uncertainty, and share candid insights into their own portfolios. The episode pivots between big-picture macro talk — especially around tech and AI — and practical, personal financial advice, with a healthy dose of irreverent Prof G humor.

Key Discussion Points & Insights

1. Setting the Table: The State of the Market (04:46–08:21)

• 2025 has been another big year for markets, particularly tech, but sentiment among investors is deeply wary or even negative—despite returns.
• Galloway: “I’ve never seen a bull market that more people hate. … It’s like you’re waiting for someone to break up with you.”
• Fragmented expert opinion is evident: Some see a bubble, others see solid fundamentals, and almost everyone is anxious about AI.

Notable Guest Highlights Montage:

• Aswath Damodaran (05:08): The issue is ownership, not just AI, as technology can be both liberating and devastating depending on who controls it.
• Michael (05:57): Concern that leverage is driving the AI boom, parallels to 1999–2000 dot-com exuberance, plus “there’s a lot of stuff in private credit we just don’t know about.”
• Jonathan Cantor (06:56): No place to hide if correction comes; for the first time, even collectibles and cash look more attractive than stocks and bonds.

Scott Galloway (07:51): Predicts a “profit taking correction” in 2026; agrees with Michael on a likely 10–15% drawdown, but sees stocks recovering after.

2. The Wall of Worry: Why So Bearish? (09:05–11:44)

• Market Sentiment:
  • “Wall of worry” and “cautiously pessimistic” feelings dominate discussions of the bull market (09:05–10:25).
  • Ed Elson: Bearishness is widespread, but risks are largely known and priced in (10:25–11:44).

Ed’s Bear and Anti-Bear Case (11:44–16:17)

Bear Case for 2026:

1. AI Bubble: $350B AI capex in 2025 (up from $200B), heavy borrowing and concerning circular deals, e.g., Nvidia & OpenAI. Any exogenous event (esp. at OpenAI) could trigger pain.
2. Valuations: S&P 500 trading at 31x earnings, near 1999-like levels.
3. Due for Correction: Three huge years in a row (24% in 2023, 23% in 2024, 17% projected for 2025) make another outsized return unlikely.

Anti-Bear Argument:

1. Declining Interest Rates: Fed rates at 3-year lows; more cuts possible with new Trump-appointed chair.
2. Deficit Spending: “Big beautiful bill” pumping $480B fiscal support into the economy.
3. AI Not Catastrophic (Yet): Only a few companies behaving dangerously; big tech has cash and solid businesses. “Whether or not AI works, Microsoft’s going to be fine….”

Ed’s View: Stagnant or subdued returns in 2026, not a bear market.

3. The AI Paradox & Systemic Fragility (16:17–23:30)

• Galloway: The danger is fragility—market driven by unrealistic AI expectations and overconcentration. “If Nvidia sneezes, the entire global economy is going to get walking pneumonia.” (16:17–20:32)
• AI’s impact may be less about new revenue and more about cost-saving layoffs, with risk of societal upheaval. (20:32)
• “If you had to go to sleep for a year, would you rather wake up and find out these stocks had doubled or they’d been down 40 or 50%? And I’m not sure I’d pick the former.” (19:29)
• Ed: Two gigantic forces: overdue correction vs. political incentives (Trump’s Fed, deficit spending) to keep markets propped up; likely result is “meh” returns. (21:30–23:30)

4. Personal Strategies and Lessons from History (25:47–37:39)

Trusting Emotions and Market Timing

• Galloway recounts panicking and selling all his stocks when Trump was elected in 2016, incurring unnecessary tax and missing gains (25:47–26:20):

  “I probably lost 10% of my net worth and 25% of my stock market value by acting out of emotion… When people hate a market like this, it usually goes up.”

• “It sounds easy in theory... It’s really hard. I have never been able to time the market.” (29:48–30:20)

• Value investing’s strength is you rarely have to make sell-or-hold decisions.

5. What Galloway and Elson Are Doing With Their Money (31:12–42:07)

Scott Galloway’s Strategy

• (31:12) “I am always in the market. … I take leverage up and down.”
• Paid down most real estate debt to have financial firepower.
• Diversified heavily after losing his wealth twice (“story of privilege”).
• Debating whether to sell or rent out London home as he’s “so long real estate.”
• Making direct private company investments (e.g., Section, Prof G).
• Bought a significant piece of art after Demodaran said collectibles might be prudent.
• Gradually reducing public markets exposure (“going to sell my Apple stock, holding on to Amazon”).
• “Trying to create a basket of wealth such that if the market goes to shit, I’m down 30%, not 120% where I have been before.”

Quote:

“If you’re out there and you’re not sure what to do, welcome to the club. Buy low-cost index funds and make sure you’re diversified.” (37:18)

Ed Elson’s Take

• (37:39) “This is the year of de-risking.”
• Most investors’ portfolios are currently overweight Big Tech due to their disproportionate run-up and S&P 500’s construction.
• “I think it’s time we take our win… and diversify. … I can tell you with almost 90% certainty you’re not diversified enough right now.” (39:20)

Ed’s Recommendations (40:21–44:24):

• Equal-weight S&P 500 Index Fund: More exposure to the “other” 490 companies.
• Sector Diversification: Look for underperforming non-tech sectors, particularly consumer staples and healthcare.
• International Exposure: Invest in emerging markets (esp. China/India) and non-US equities.
• Small Caps: Russell 1000 and 2000 — albeit with some concerns about value (P/E at 38, up from 16).
• Invest in Yourself: Courses, certifications, health — “If you don’t know where to invest, invest in yourself.” (42:07)

Memorable Exchange:

• Ed: “I’m going to really think about [upgrading myself]... Maybe you were thinking about a gym membership… now would probably be a good time.”
• Scott: “That’s it. I’m going to get the scrotum lift.” (44:24)

6. Market News Segment: The Warner Bros. Bidding War (46:53–64:32)

Summary of the Media Acquisition Frenzy

• Paramount outbids Netflix for Warner Bros. Discovery ($30 vs. $27.75 per share), turning the process into a bidding war.
• Galloway’s big take: Most acquisitions fail to be accretive (“two-thirds of the time they end up being not accretive to shareholders”). Only rare exceptions like Zuckerberg’s Instagram/WhatsApp deals succeed.
• Rollup strategies can work in declining businesses, but streaming isn’t that simple now.

Regulatory and Strategic Risks

• Galloway: “The only possible winner here… might be Netflix, [if] they can impose monopoly power. But for everyone else, it won’t pencil out.”
• Fear is that consolidation will shift advantage from consumers and labor to shareholders — leading to price hikes and weaker creative labor bargaining.
• Paramount’s bid faces questions about national security (Jared Kushner seeking Gulf funding) and antitrust.

Sharp Quote:

“All they are doing is making one of crowning. This will be a bad acquisition, maybe with the exception of Netflix… But this will be a bad deal at this price for almost any other acquirer.” (55:00)

• Bids are escalating “because testosterone has entered the room,” and all the players are overpaying to ‘win’ the asset.

Zaslav’s Masterstroke

• David Zaslav, CEO of Warner Bros. Discovery, is lauded (if ironically) for turning a declining asset into a “trophy” that has engaged the world’s richest and most powerful.
• Galloway: “He’s the Adam Neumann of media. I’m going to figure out a way to lose other people’s money and make a shit ton of money.”
• Ed: “I’m such a David Zaslav fan at this point, I’ve completely turned around on it.”

7. Reflective & Emotional (64:35–65:30)

On Art & Purpose:

• Galloway discusses owning only two pieces of art, one a photo of Otto Frank, which he looks at each morning to feel gratitude.
• “I think everyone should find… something that makes them feel good about their situation, grateful.”

8. Week Ahead & Final Predictions (65:51–66:35)

• Upcoming: Employment and inflation data, Nike, FedEx, and General Mills earnings.
• Galloway’s surprise asset pick:

“Venezuelan assets. … There’s going to be a regime change and an oil-rich Venezuela is going to boom over the next three to five years…” (66:05)

Notable Quotes (with Timestamps)

• “I’ve never seen a bull market that more people hate. ... It's like you’re waiting for someone to break up with you.” — Scott Galloway (09:05)
• “What we have here is not a robot problem or an AI problem, but an ownership problem.” — Aswath Damodaran (05:08)
• “If Nvidia sneezes, the entire global economy is going to get walking pneumonia.” — Scott Galloway (16:17)
• “If you’re out there and you’re not sure what to do, welcome to the club. Buy low-cost index funds and make sure you’re diversified.” — Scott Galloway (37:18)
• “I think it’s time we take our win… and diversify. … you’re not diversified enough right now.” — Ed Elson (39:20)
• “All they are doing is…crowning … Maybe with the exception of Netflix… this will be a bad deal for almost any other acquirer.” — Scott Galloway (55:00)
• “He’s the Adam Neumann of media. I’m going to figure out a way to lose other people’s money and make a shit ton of money.” — Scott Galloway on Zaslav (62:13)
• “If you don’t know what to invest in, you might as well invest in yourself.” — Ed Elson (42:07)

Actionable (and Humorous) Takeaways

• Diversify: Most portfolios are now tech-heavy by accident — go equal-weight, add international, sector, and small-cap exposure.
• Don’t Try to Time the Market: Even professionals can’t do it reliably.
• Invest in Yourself: Courses, skills, and even your health.
• Be Grateful: Find mementos or art that connect you to gratitude.
• Beware M&A Mania: Most deals enrich executives and bankers, not shareholders.
• If in doubt, try a scrotum lift.

Timestamps for Key Segments

• [04:46–08:21] — Market sentiment montage, key guest insights
• [09:05–11:44] — Wall of worry and Ed’s bear/anti-bear case
• [16:17–23:30] — The fragility of the AI-driven market and Galloway’s concerns about bubble, layoffs, and societal impact
• [25:47–37:39] — Personal investing mistakes, lessons on market timing
• [31:12–42:07] — How Scott and Ed are investing for 2026; the case for diversification and “de-risking”
• [46:53–64:32] — Warner Bros. Discovery bidding war, M&A follies, regulatory/political risks
• [64:35–65:30] — Art and gratitude
• [66:05] — Galloway’s tip: Venezuelan assets

Original Tone: Fast, candid, irreverent, and self-deprecating—with earnest reflection and hard-won financial wisdom layered alongside industry analysis.

Summary prepared for listeners seeking a thorough, actionable, and colorful breakdown of “Prof G Markets: What’s the Right Investment Strategy for 2026?”