Prof G Markets: Goldman and Apple Part Ways, SheIn and Temu, and Charlie Munger’s Legacy | The Prof G Pod with Scott Galloway

Intro

In this episode of “The Prof G Pod with Scott Galloway,” the hosts discuss a range of topics including Goldman and Apple’s partnership, the fast fashion industry, and Charlie Munger’s legacy. They also touch on Elon Musk’s behavior and appearance at the DealBook conference, the housing market in the US, regulatory challenges for businesses, and the potential end of the partnership between Apple and Goldman Sachs. The episode provides insights into market trends, business strategies, and the impact of media portrayal on public perception.

Main Takeaways

Elon Musk’s Behavior and Media Attention

• The hosts express concern about Elon Musk’s behavior and mental state based on his appearance at the DealBook conference.
• They question the public’s reaction to Musk’s behavior, suggesting it may be overblown and not worth the attention.
• The conversation explores the possibility of Musk being mentally ill, with varying perspectives from the hosts.

Market Vitals and Headlines

• A review of market vitals includes the S&P 500’s best month in over a year, the dollar’s sharp sell-off, Bitcoin’s 18-month high, and the fall of 10-year treasuries yield below 4.3%.
• Headlines discussed include US home prices reaching an all-time high, Binance and its CEO pleading guilty to money laundering, leadership changes at Open AI, Saudi Arabia’s investment in Heathrow Airport, and Mark Cuban’s stake in the Dallas Mavericks.

Housing Market Challenges and Government Initiatives

• The speaker shares personal experience of buying a home in San Francisco and highlights the staggering increase in home prices compared to average salaries.
• The housing market in the US has seen a significant increase in prices and interest rates, making it difficult for many people to afford homes.
• The increase in interest rates has unexpectedly led to a rise in housing prices, resulting in a shortage of supply.
• The Biden administration has launched the Housing Supply Action Plan to address the housing crisis by reforming zoning policies and converting empty commercial offices into residential properties.

Regulatory Challenges and Business Practices

• The episode highlights the challenges faced by businesses operating outside of the law, particularly outside the US, and the potential regulatory consequences.
• The Department of Justice’s intervention in a case is discussed, emphasizing the importance of investing in regulatory bodies to address money laundering, terrorism financing, and human trafficking.
• The need for disincentives in addition to incentives for risk-taking and hard work is emphasized.

Apple and Goldman Sachs Partnership

• The episode explores the potential end of the partnership between Apple and Goldman Sachs for the Apple credit card and consumer savings account.
• The hosts discuss the impact of Goldman’s communication around the potential end of the partnership, which may have positioned Apple as being in charge and could affect the Goldman brand.
• The media’s portrayal of the breakup is analyzed, highlighting a pro-Apple bias and the impact of headlines on public perception.

The Fast Fashion Industry and Supply Chain Practices

• Timo, a Chinese commerce giant, is discussed for its doubled revenue due to its online shopping app offering heavily discounted products from China.
• The rise of Timo’s monthly US sales compared to fast fashion retailer Shein is highlighted as the next wave in retail apparel.
• A brief history of the evolution of casual apparel and strategic shifts in retail and branding is provided, including the success stories of The Gap, Old Navy, Zara, H&M, and Uniqlo.
• Companies like Timo and Shein have achieved explosive growth and profitability by developing innovative supply chains, but concerns are raised about labor practices and tax compliance.

Charlie Munger’s Legacy in Value Investing

• The passing of Charlie Munger, vice chairman of Berkshire Hathaway, is discussed, highlighting his legacy in value investing and building Berkshire into a $780 billion company.
• Munger’s straightforward views on subjects such as Bitcoin, corporate “bullshit,” and the importance of common sense and kindness are shared.
• His investment philosophy of buying great companies at a fair price over fair companies at a great price is emphasized.

Summary

Elon Musk’s Behavior and Media Attention

The hosts express concern about Elon Musk’s recent behavior and appearance at the DealBook conference, questioning whether the public’s reaction is overblown and suggesting it may be pseudo-news. They explore the possibility of Musk being mentally ill and share varying perspectives on the matter. The speaker also expresses bias against Musk and criticizes his delusions of grandeur.

Market Trends and Headlines

The episode reviews market vitals such as the S&P 500’s performance, the dollar’s sell-off, Bitcoin’s high, and the fall of 10-year treasuries yield. Headlines discussed include US home prices reaching record highs, Binance and its CEO pleading guilty to money laundering, leadership changes at Open AI, Saudi Arabia’s investment in Heathrow Airport, and Mark Cuban’s stake in the Dallas Mavericks.

Housing Market Challenges and Government Initiatives

The speaker shares personal experience of buying a home in San Francisco, highlighting the significant increase in home prices compared to average salaries. The housing market in the US has seen rising prices and interest rates, making it difficult for many people to afford homes. The unexpected increase in interest rates has led to a shortage of supply. The Biden administration has launched the Housing Supply Action Plan to address the crisis by reforming zoning policies and converting empty commercial offices into residential properties.

Regulatory Challenges and Business Practices

The episode discusses the challenges faced by businesses operating outside of the law, particularly outside the US, and the importance of investing in regulatory bodies to address issues such as money laundering, terrorism financing, and human trafficking. The need for disincentives in addition to incentives for risk-taking and hard work is emphasized.

Apple and Goldman Sachs Partnership

The potential end of the partnership between Apple and Goldman Sachs for the Apple credit card and consumer savings account is explored. The hosts discuss the impact of Goldman’s communication around the potential end of the partnership, highlighting a pro-Apple bias in the media’s portrayal of the breakup. The importance of effective communication for public companies and the impact of headlines on public perception are emphasized.

The Fast Fashion Industry and Supply Chain Practices

Timo, a Chinese commerce giant, is discussed for its doubled revenue through its online shopping app offering heavily discounted products from China. The rise of Timo’s sales compared to fast fashion retailer Shein is highlighted as the next wave in retail apparel. The episode provides a brief history of the evolution of casual apparel and the strategic shifts in retail and branding. Concerns are raised about labor practices and tax compliance in companies like Timo and Shein.

Charlie Munger’s Legacy in Value Investing

The passing of Charlie Munger, vice chairman of Berkshire Hathaway, is discussed, highlighting his legacy in value investing and building Berkshire into a $780 billion company. Munger’s straightforward views on subjects such as Bitcoin, corporate “bullshit,” and the importance of common sense and kindness are shared. His investment philosophy of buying great companies at a fair price over fair companies at a great price is emphasized.

Conclusion

This episode of “The Prof G Pod with Scott Galloway” covers a wide range of topics including Elon Musk’s behavior, market trends, housing challenges, regulatory issues, the Apple-Goldman Sachs partnership, the fast fashion industry, and Charlie Munger’s legacy. The hosts provide insights into these subjects, offering perspectives on media portrayal, public perception, and the importance of effective communication. The episode highlights the complexities of the business and investment world, emphasizing the need for transparency, ethical practices, and strategic decision-making.