Markets turn Trump, Long rates spike, Election home stretch, Influencer mania, Saving Starbucks

1. 0:00 – 3:49

   Bestie intros!

   1. JCJason Calacanis0:00

      Jason, do you want to go up to the bedroom, knock on the door, and wake Chamath up?

   2. DSDavid Sacks0:03

      Where is he? (laughs)

   3. JCJason Calacanis0:04

      You're in his house. Go get him. Let's go.

   4. DSDavid Sacks0:06

      He's at the office. He went to the office. He's not here.

   5. JCJason Calacanis0:08

      Oh, he went to the office.

   6. DSDavid Sacks0:09

      He's at the office. We're trying to find Chamath at the moment. Oh, here's Chamath. Okay.

   7. CPChamath Palihapitiya0:13

      Are you wearing my goddamn sweater? What is, what is ...

   8. DSDavid Sacks0:16

      (laughs)

   9. CPChamath Palihapitiya0:16

      Is that my ... You're in my house.

   10. DSDavid Sacks0:17

       Chamath. Chamath.

   11. CPChamath Palihapitiya0:18

       Is that my sw... No. I am so tilted. Where is my wife? What the (beep) ?

   12. DSDavid Sacks0:22

       What? Don't worry about your wife.

   13. CPChamath Palihapitiya0:24

       No. Oh my God.

   14. DSDavid Sacks0:25

       Amore. Amore, uh, this port is great.

   15. CPChamath Palihapitiya0:28

       (laughs) Where is Matt?

   16. DSDavid Sacks0:29

       Alvin, he needs anything else?

   17. CPChamath Palihapitiya0:29

       Hold on. I'm calling Matt. He ... Take off my swe-

   18. DSDavid Sacks0:31

       Oh, amore.

   19. CPChamath Palihapitiya0:32

       It's okay. Amore. Don't touch my wife.

   20. DSDavid Sacks0:34

       Oh, my God. He needs everything else? (laughs)

   21. JCJason Calacanis0:36

       Oh, my Lord. Oh, my Lord. She's tainted.

   22. CPChamath Palihapitiya0:38

       Oh, my God. No. (laughs) I'm so tilted. I'm la- ... (laughs)

   23. DSDavid Sacks0:39

       She's tainted. Amore. Don't you worry, amore. You know your cashmere sweater? It's so, so soft. Take my sweater off.

   24. CPChamath Palihapitiya0:47

       I'm so tilted right now.

   25. DSDavid Sacks0:47

       It's so soft, amore.

   26. CPChamath Palihapitiya0:47

       This is so tilted. Get out of my house.

   27. DSDavid Sacks0:49

       Alvin, do you need anything? I have everything you need.

   28. JCJason Calacanis0:50

       Good Lord.

   29. CPChamath Palihapitiya0:51

       But we'll be done at 1:00, so I'll see you then.

   30. DSDavid Sacks0:53

       Please let me know if I can-
2. 3:49 – 9:08

   Announcement: Besties are hosting The All-In Holiday Spectacular in San Francisco on December 7th! Get tickets: https://allin.com/events

   1. CPChamath Palihapitiya3:49

   2. JCJason Calacanis3:49

      Why don't you wanna moderate today? You're on fire.

   3. CPChamath Palihapitiya3:51

      Uh ...

   4. JCJason Calacanis3:51

      Just moderate the show.

   5. CPChamath Palihapitiya3:53

      Well, no. I was just ... I was gonna be traveling, and I wanted to do a good job. And I, you know, I thought maybe you ... you would love to get your chance at moderation, so lead us off here, fearless, uh, Dave Friedberg, moderator.

   6. JCJason Calacanis4:04

      Okay. Well, so that is the announcement to start the show. Jason taking a week off from moderating.

   7. CPChamath Palihapitiya4:10

      Yes.

   8. JCJason Calacanis4:10

      Gonna be a bestie-guestie, gonna be a participant on the panel-

   9. CPChamath Palihapitiya4:13

      Oh. There you go.

   10. JCJason Calacanis4:14

       ... this week as we kick this off. So I'll be moderating this week. We're gonna do a, a couple housekeeping points. First off, very excited to announce that we are doing another live event.

   11. CPChamath Palihapitiya4:26

       Mm-hmm.

   12. JCJason Calacanis4:26

       After the success of the summit during September, we had great content. We had great parties. Everyone had a great time. But a lot of people said they wished they could have been a part of it, so we are gonna try and do more live events. So we have pulled one together very last minute, but we are gonna make it incredible. Saturday, December 7th in San Francisco around 5:00 PM, we are gonna do the All-In Holiday Spectacular at the Palace of Fine Arts in San Francisco. It's gonna be incredible. Tickets are going on sale today at allin.com/events. Not gonna wanna miss it. There's gonna be a really fun show on stage with us and some guests, followed by open bar, food trucks, DJ, casino party. It should be a really great time, a real fun winter wonderland after-party after the stage show. And so we're really excited to have folks come and join us, um, at the Palace of Fine Arts on December 7th. It's gonna be awesome. You guys excited?

   13. CPChamath Palihapitiya5:19

       Yeah.

   14. JCJason Calacanis5:19

       Great.

   15. CPChamath Palihapitiya5:20

       Very excited, yeah.

   16. DFDavid Friedberg5:21

       All right. So I have a question.

   17. CPChamath Palihapitiya5:22

       Yeah.

   18. JCJason Calacanis5:23

       Mm-hmm.

   19. DFDavid Friedberg5:23

       Is our attendance required at this thing?

   20. JCJason Calacanis5:25

       (laughs) I knew that was coming.

   21. CPChamath Palihapitiya5:27

       (laughs)

   22. DFDavid Friedberg5:27

       I have no desire to participate in this.

   23. CPChamath Palihapitiya5:30

       (laughs)

   24. JCJason Calacanis5:30

       You don't wanna be at what's called a party with Sacks. You don't wanna-

   25. CPChamath Palihapitiya5:33

       Everybody in the world wants to do something except Sacks. (laughs)

   26. DSDavid Sacks5:36

       (laughs)

   27. DFDavid Friedberg5:36

       I thought-

   28. CPChamath Palihapitiya5:37

       Yeah.

   29. DFDavid Friedberg5:37

       ... I was signing up for a podcast.

   30. JCJason Calacanis5:38

       (laughs)
3. 9:08 – 27:23

   Macro and markets: making sense of unique asset diversions

   1. CPChamath Palihapitiya9:08

   2. JCJason Calacanis9:08

      Boys, welcome to The All-In Pod. This is episode 201. And we're gonna kick it off by talking about what's going on in markets, which is one of the kind of most interesting, challenging enigmas of the day. Or, or maybe it's not. Maybe it's pretty simple. But there seems to be a diversion in assets that is pretty unusual that hasn't been seen in, in some time, and a lot of market commentators, analysts, economists are kind of trying to figure out what's going on and why. The first is that bonds are falling. So US Treasury yields, as a result of bonds, uh, declining in price, have spiked up. We nearly hit the 10-year yield dropping as low as 3.5 in September, obviously leading up to the, the big 50 bp rate cut. And as of, uh, this morning, we're seeing the 10-year yield over four and a quarter. At the same time, we're seeing gold prices spike. So gold is typically a safe asset, and gold has moved considerably, as you all can see here, from the start of the year, where it was around 2,000 an ounce, up to 2,750 an ounce. An incredible run-up. One of the best-performing assets of the year. And then finally, in a market like this, you would typically see pain in equities. But we've seen the opposite. The S&P 500 is up considerably, has been on this endless run-up, all-time highs, closing at all-time high every day.

   3. SPShaan Puri10:33

      Go Bitcoin. Where's your Bitcoin chart, buddy?

   4. JCJason Calacanis10:34

      And let's pull up Bitcoin. And then the other kind of-

   5. DFDavid Friedberg10:37

      Nobody cares about gold. Show Bitcoin.

   6. JCJason Calacanis10:39

      Well, there's a lot more assets that have moved into gold than Bitcoin. But here's Bitcoin at today, this morning, 68,000.

   7. DFDavid Friedberg10:46

      Oh, who picked, who picked that at the beginning of the year?

   8. JCJason Calacanis10:50

      (laughs) So-

   9. DFDavid Friedberg10:50

      Oh, was it me?

   10. JCJason Calacanis10:50

       J-

   11. DFDavid Friedberg10:51

       Hold on one second. Boop, boop, boop, boop, boop. (laughs)

   12. JCJason Calacanis10:54

       Well, Jamal, give us your read on what's going on.

   13. DFDavid Friedberg10:57

       There's a... There's another couple of nuances here that I think are important. The US dollar complex is thriving, which means, like, the US dollar is strong. Back-end yields are rising. And then another thing that I look at is this thing called put-call skew. So basically, like, on balance, how are people hedging in the short term? And in the bond market, they own a lot more puts than they do calls. I think that this is the entire financial infrastructure of the world repositioning itself from what was a toss-up election to a Trump win. And when you look at why, it's because when you s... Forget the candidates themselves for a second, but if you think about the actual policies and where the spending will occur, I think that there has been a very clear decision that the Trump economic plan will drive better growth than the Harris plan. And if you think that there is more growth coming, typically what will come with that is a little bit more inflation. ... the risk premium that you're going to need in a high growth environment is higher. What is risk premium? That is, how much do I want to invest for a risky asset versus a safe asset. And so all of these things are coalescing. So I think that the short term takeaway that I have, just looking at all of this data, is that in the economic distribution of outcomes, this is now tilted overwhelmingly to a Trump win. And this is not an emotional statement or what I want to happen, but this is just an observation how, how tens of trillions of dollars of self-interested financial actors have now repositioned their risk. And if Trump wins, which it looks like he's increasingly going to do, and if he wins by the margins that it looks like it's going to do, you're gonna see a lot of these things exacerbate. Gold's gonna go up more probably, Bitcoin will probably go. The short term economic upside for the economy will probably get reflected in higher equity prices, but it'll also push out long-term rates. The inflation picture becomes a little bit murkier. But I think that that's what's happening, I think that the, the financial markets are pricing in a Trump win.

   14. JCJason Calacanis13:35

       Sorry, just to understand better, why does gold go up in a Trump win?

   15. DFDavid Friedberg13:39

       I think in the short term what happens is that you see more economic growth, but in the medium term inflation goes up and so you want a hedge.

   16. JCJason Calacanis13:45

       Right s-

   17. DFDavid Friedberg13:46

       So it's, it's more about a durational balance of assets, so in the short term you'll be long the things that will generate earnings, but in the medium to long term you want to hedge yourself. So Bitcoin and gold I think will trade that way.

   18. JCJason Calacanis13:58

       Well, let's pull up the video clip from Paul Tudor Jones, Nick.

   19. Given all of the things you're saying, are you off buying gold and Bitcoin and, and hiding somewhere?

   20. PJPaul Tudor Jones14:06

       I think all, I think all roads lead to inflation. We're gonna end up, if you... And so-

   21. JCJason Calacanis14:12

       But does all roads lead to inflation, therefore gold is a good investment? Is Bitcoin a good investment to you?

   22. PJPaul Tudor Jones14:16

       I, I, I'm long gold, I'm long Bitcoin. I think commodities are so ridiculously under-owned, so I'm long commodities. I think most young people find their inflation hedges via the NASDAQ, that's also been great. It's probably some combination. I probably have some basket of gold, Bitcoin, commodities, and NASDAQ, something like that, and I own zero fixed income. If I had my cash-

   23. JCJason Calacanis14:38

       Right.

   24. PJPaul Tudor Jones14:38

       ... it'd be very short term.

   25. JCJason Calacanis14:40

       Sax?

   26. DSDavid Sacks14:41

       Well, I think as you heard right there, the key line that Paul Tudor Jones said was, "All roads lead to inflation." I mean, that, that's what's basically happening right now is that the market is afraid that inflation is not whipped and is gonna resurface, and the Fed may have to pivot from the pivot and raise interest rates. That's why he doesn't want to own any Treasuries. Separately, another financial legend, Stan Druckenmiller, gave an interview where he has something like a 20% short position, meaning 20% of his holdings are short US Treasuries right now, so he's betting that there are long-term inflation pressures and that rates are gonna have to rise. And, and you're seeing again that since the Fed cut rates on September 18th by 50 basis points, that the 10-year T-bills yield has risen by 60 basis points. So I, I think, m- my interpretation is that this is less about the election and more about the markets not liking the Fed's rate cut on September 18th. I think that in hindsight it was too big. We discussed it on this show, and I pointed out that the 50 base point cut was contradictory in the sense that the only two times in recent history where the Fed began a rate-cutting cycle with a 50 base point cut was in 2001 and 2008, which were on the verge of pretty big recessions. And so the Fed felt like it needed to cut dramatically in order to help stave off those recessions. But that was not Powell's rhetoric. What Powell said is the economy was doing very well. So what I said a month ago was with... If the economy's doing really well, why wouldn't you just tiptoe into the rate-cutting cycle with, say, a 25 base point cut and then see how the market absorbs it and get another month's inflation data? Well, we've gotten another month of inflation data and it's showing that, uh, these are not huge moves, but it's showing that inflation in, uh, was it Core CPI? Was just a little bit higher than expected. So again, the market is concerned that inflation is not whipped, that the Fed may have been overly precipitous in how it cut, cut rates, and then the other thing is they just do not like the long-term fiscal picture of the US. One other chart we should bring up is interest on the national debt. What you can see here is that it has gone absolutely parabolic in the last couple of years. Our interest on the debt's something like what, like 1.3, 1.4 trillion a year?

   27. JCJason Calacanis17:14

       1.35 trillion run rate. Yep.

   28. DSDavid Sacks17:16

       Yeah.

   29. CPChamath Palihapitiya17:16

       $3500 per American. Per year.

   30. DSDavid Sacks17:20

       And it's something like 20 to 25% of federal revenue now is going to debt service, and this continues to increase. Now, I think there was a, an expectation that we'd be able to get this line to go back down once we had rate cuts, right? Because if inflation's licked and the Fed can lower interest rates again and we can get back to a 2% 10-year bond, which is where we were a few years ago, then all of a sudden that national debt service becomes a little bit more reasonable, right? I mean, you can, you could service that debt at half the cost. But now it looks like that may not happen. So just to, to wrap this up, I just think that the market doesn't like these fundamentals of the US fiscal picture. You've got rapidly increasing debt service costs, you've got an inflation picture that is murky and may not be going away, and the bond markets are starting to price in higher interest rates for longer. And this is why-Paul Tudor Jones is saying all roads lead to inflation, and this is why Druckenmiller is shorting US treasuries.
4. 27:23 – 38:28

   Gen Z's economic cultural movements

   1. CPChamath Palihapitiya27:23

      I, I do think there's another thing that's worth sort of unpacking here because when you do see people feel like the economy is working against them, all kinds of interesting movements start, cultural movements, et cetera. And I think that's what we're seeing in this election, is people who believe in capitalism and free markets and people who don't, people who believe in free speech, people who don't, people who see themselves as victims, victims and then other people who see them as creators and... I really study a lot of, like, what young people are doing. And I don't know if you guys are watching sort of the anti-work movement or the FIRE movement, which is Financial Independence Retire Early. A lot of young people now are looking at financial markets, whether it's Robinhood or Coinbase or Price Picks, whatever market it is, young men especially, and they're saying, "I need to control my destiny. I need to... This capitalism is not working for me. I need to own equities, I need to make trades, and I need to retire early and have experiences because the capitalist system is broken to some extent." And then there's another group of people who are just anti-work and there was this term back in the day called NEET, not employed, not being educated, and not in training. Basically, the people who are called the unproductives. And if you look at the peak engagement in employment in our country, and Japan has similar trends, uh, although they are probably 10 years ahead of us in this.

   2. DFDavid Friedberg28:50

      It sounds, it sounds anything but NEET. (laughs)

   3. CPChamath Palihapitiya28:52

      Yeah, it's not NEET.

   4. DFDavid Friedberg28:53

      It sounds, it sounds terrible.

   5. CPChamath Palihapitiya28:54

      Uh, we peaked, but we, we peaked at 68, 69% labor participation, and we're 10% off that, maybe more. Maybe we're at 61 or 62. I think a lot of people are gonna give up because the debt is gonna be so crushing that the logical thing to do, if you don't think you can get out from under it, might be to move in with your parents or two or three other people, tighten your belts, and enjoy life and go skiing and, uh, and, and go have experiences. And a lot of young people are electing to do that. In other words, they're opting out-

   6. DFDavid Friedberg29:18

      Well, to your point.

   7. CPChamath Palihapitiya29:19

      ... of the American dream.

   8. DFDavid Friedberg29:20

      Sorry. To your point, the one thing, the one thing that I realized with a lot of young men that, Jason, I think you're, you're really hitting the nail on the head, is a lot of them now do not view the job that they do as their only path to economic independence. And if anything, they may do a job, but then they're actively trading on the side something, crypto, options, whatever. They're on Robinhood, they're using Coinbase because it's almost like they've separated in their mind that the job they do will never give them the financial independence they want. And so instead, they're gonna do that job because they like it, hopefully they love it, but then separately, they're gonna go and speculate to try to make money. It's a really interesting thing because I had always been taught, you earn your wealth through the job you have. And so if you wanted to make-

   9. JCJason Calacanis30:10

      Yeah.

   10. DFDavid Friedberg30:10

       ... more money, you have to ladder up and do something different.

   11. JCJason Calacanis30:13

       Yeah, so the-

   12. DFDavid Friedberg30:14

       But I, I think that that's not true. That, that idea has been sort of decoupled now. That's a really interesting change in how people approach work, I think.

   13. CPChamath Palihapitiya30:20

       I, I call them Gen Bet. Like, they're the generation that believes zom... There's this, like, subset of them, it's not all of them, a, a number of them are just quiet quitting.... and they just don't believe in capitalism. And then there's this other group which are, like, trying to get control, I call them Gen Bet because they just wanna bet on themselves and, you know, and, uh, if they don't get wrecked by the financial markets cha- trading options, you know, and, and doing price picks-

   14. DFDavid Friedberg30:42

       But the other... Sorry. The other, the other thing I'll say, just in recruiting a bunch of people at 80/90 over the last three or four months is there is an enormous difference that I have seen psychologically in the people that are 25 and older-

   15. CPChamath Palihapitiya30:56

       Hmm.

   16. DFDavid Friedberg30:56

       ... versus the people that are 25 and under. And-

   17. CPChamath Palihapitiya30:59

       What is this, right?

   18. DFDavid Friedberg30:59

       ... I'm, I'm calling 25 as a rough number, but there are kids that are 18, 19, 20, 21 years old that are off the charts good. They're motivated.

   19. CPChamath Palihapitiya31:10

       Yeah.

   20. DFDavid Friedberg31:10

       They're hungry. They're like, "Let's get after it," and they are honestly different in the way they approach their job than folks that are in their late 20s and early 30s. These folks in their-

   21. CPChamath Palihapitiya31:19

       I think they're the first generation who didn't go into debt in college and didn't buy into that. Like, so they might... The, the millennials ahead of them might have, like, taken the bullets, you know?

   22. DFDavid Friedberg31:30

       Yeah. The folks that are in their late 20s, early 30s, and I'm not trying to generalize or disparage, but they lack a level of motivation, again, generally speaking, that-

   23. CPChamath Palihapitiya31:38

       Yes.

   24. DFDavid Friedberg31:39

       ... the youngest folks in the workforce have and that also that people in our generation sort of have. So they're sort of sandwiched in between a very different way of approaching work.

   25. CPChamath Palihapitiya31:50

       Yeah.

   26. DFDavid Friedberg31:50

       And I... And as a result, they stand out, and I don't think they're standing out for all the right reasons.

   27. CPChamath Palihapitiya31:54

       Hmm.

   28. JCJason Calacanis31:56

       Well, the majority now of young people, the number, I believe, and Nick, if you could pull this up, 57% of Gen Zers want to be influencers as their primary career now, that the idea of working a job is almost like a secondary option. The primary option that everyone would thri- strive for is to be, uh, an influencer, and this number has grown considerably, continues to grow. And in fact, if you look at the, uh, the rest of this report, this was out of a console-

   29. CPChamath Palihapitiya32:28

       Wait. Did you say 50% of Gen Zers aspire to be influencers?

   30. JCJason Calacanis32:34

       Correct.
5. 38:28 – 53:52

   Reallocating assets for a new period of constraints

   1. BGBill Gurley38:28

      here." To wrap up the, the conversation about where markets are headed, Sax, I think we were gonna just do a quick around the horn. Anything that you've repositioned in your portfolio around investing or asset classes that you shift as we face kind of looming budget crises, the election cycle, self- I'm trying to sell every- ... inflation. ... single SaaS startup I have in secondary markets.

   2. CPChamath Palihapitiya38:51

      (laughs)

   3. BGBill Gurley38:51

      And you know how many bids there are for these SaaS companies? Negative one bid.

   4. CPChamath Palihapitiya38:56

      Hm. That's interesting. I, I had a couple of my startups get, get offers. I've had three or four secondary offers in the last two weeks I've had to, like, deeply consider and they weren't like 75-

   5. BGBill Gurley39:07

      What kind of companies?

   6. CPChamath Palihapitiya39:08

      Let's see. Two were SaaS, and then one I can't say because it'd be too easy to guess. But the bottom feeders went from offering, like, an 80% discount to now a 25% discount, so there is some progress being made.

   7. BGBill Gurley39:17

      You know you're not allowed to sell your, your shares in All-In, right?

   8. CPChamath Palihapitiya39:21

      I'm trying. I'm trying. Brad-

   9. BGBill Gurley39:22

      Yeah.

   10. CPChamath Palihapitiya39:22

       ... Gerstner's bought 7% so far.

   11. DSDavid Sacks39:24

       (laughs)

   12. CPChamath Palihapitiya39:24

       So I'm, I'm, I'm quickly offloading to Gerstner-

   13. BGBill Gurley39:27

       Oh my God.

   14. CPChamath Palihapitiya39:27

       ... as much as I can.

   15. DSDavid Sacks39:27

       You just, you, you just super tilted Freebird there. Looking at-

   16. BGBill Gurley39:31

       Don't get me started.

   17. DSDavid Sacks39:31

       ... he's laughing, but inside he's-

   18. CPChamath Palihapitiya39:33

       Uh, yeah.

   19. DSDavid Sacks39:33

       ... he's just about to explode.

   20. CPChamath Palihapitiya39:34

       You're gonna have to have the FiF festival here. He's been only 7%.

   21. BGBill Gurley39:36

       Fuming. Fuming.

   22. CPChamath Palihapitiya39:36

       He gets 16 minutes per episode now.

   23. DSDavid Sacks39:37

       Well, you know what? If he'll, if he'll moderate, I'll have him.

   24. CPChamath Palihapitiya39:40

       I mean, is his moderation going okay, or should I jump in and save the show?

   25. BGBill Gurley39:43

       He should write All-In a get fit memo.

   26. CPChamath Palihapitiya39:45

       (laughs)

   27. DSDavid Sacks39:46

       Just on the question of, you know, how do you reposition? So first of all, the easy one to avoid is, is treasuries, right? I mean, do you really want to accept a 4.2% yield for 10 years to own a US bond and with the looming inflation that is still out there or the looming debt crisis that might be out there?

   28. BGBill Gurley40:06

       It's not high enough.

   29. DSDavid Sacks40:06

       So that's probably the easy one. I think the hard one is around equities, because equities are at an all-time high. Part of the reason why they're at an all-time high is because the Fed telegraph that we'd have big rate cuts this year. Remember at the beginning of this year they said there'd be seven rate cuts? Those expectations have kept coming down. I think we had one, I guess we had a double rate cut last month, and we were supposed to have one more 50 bp rate cut this year. I have to wonder if that's still gonna happen. And more to the point, if you believe Druckenmiller and Paul Tudor Jones, we might be in for a extended period of higher interest rates for longer, and that will be bad for equities. Equities normally are inflation-protected in the sense that those companies can just raise prices over time to keep up with inflation, and so equities are generally a pretty good th- thing to own in the face of inflation. But if we're in for a period of high interest rates longer than anyone thinks, that's gonna be bad for equities.

   30. BGBill Gurley41:06

       Well, I would just argue one thing, which is except in the scenario where you believe the only inevitable path is for the central banks to monetize the debt, meaning the central banks step in to buy the outstanding treasuries that need to be issued, which both supports inflation but also introduces capital into the system, and that's where both equities... That's where you could see a scenario where equities and gold go up while fixed income goes down to, to have higher rates. So, it's effectively a money printing indicator or signal. Now, my personal position on this going into this new era, if it manifests as the markets are telling us it will, is kind of where Paul Tudor Jones is. I think that commodities have... And, you know, gold is a commodity. Everyone talks about it as being the safe h- haven asset, but there are other commodities out there that are much more fungible and used in production cycles to make food, to make energy, to make goods. And commodity-linked businesses, meaning businesses whose revenue or profit grows with the underlying commodity price growing, will outperform other businesses. They're gonna struggle to raise prices or struggle to pay higher labor costs or struggle to, uh, to deal with higher COGS, whereas commodity-linked businesses that effectively just make a margin on the commodity- What's an example? A mining business, so businesses that do mining of, of natural resources, um, businesses that trade agricultural commodities. So those businesses usually make kind of a fixed margin on the underlying commodity price and they do, they do well in these cycles. So anyway, I think that Paul Tudor Jones ra- Because if you own a commodity it's not a productive asset, it's not generating yield for you. But if you own a business that's making a profit and...
6. 53:52 – 1:19:01

   Election update: Data leans Trump as we enter the home stretch

   1. JCJason Calacanis53:52

      Give us the election update. What's going on? Are we going to get your guy in office? Is it going to be Vice President Harris? What's the sense of what the polls are telling you, of what the markets are telling us? What's your read on where we're at?

   2. DSDavid Sacks54:06

      All the data is basically pointing one direction which is a- a Trump victory and by data I mean the polling, I mean the prediction markets and then the early voting numbers so if you look at the- the polls there were two new polls by mainstream media. One, The Wall Street Journal yesterday said that Trump was up three nationally and I think CNBC had a poll this morning saying that Trump was up two nationally. That's very good because-

   3. JCJason Calacanis54:33

      That's the popular vote.

   4. DSDavid Sacks54:35

      That's the popular vote so if Trump is winning the popular vote it's landslide. Most prognosticators say that because Republicans have a slight electoral college advantage that Harris would need to win the popular vote by more than 2% to have a chance at winning the electoral college. So if Trump is winning the popular vote then it's a landslide.Second area is, if you look at the state-by-state polling, Trump has been advancing pretty much in every battleground state for the last couple of weeks. If you use RCP, Trump is now ahead slightly in every battleground state and the momentum is all towards Trump. And then the final data point is around early voting in states where they have this early voting and put out the numbers. The Republicans are tracking well ahead of where they were in 2020. Now, there's still a question of, you know, does this mean that Republicans are just shifting their votes to voting earlier and then they'll do less well on election day? There's always that chance. But right now, if you're a Republican, it's what you want to see. And if you're a Democrat, it's definitely not what you, you want to see.

   5. JCJason Calacanis55:41

      Yeah. And the essay that Nate Silver wrote, uh, that was published by the New York Times yesterday said it's a 50/50 toss-up, either candidate could win, but my gut tells me it's gonna be Trump. He's kind of indicated that's where, you know, as, as a guy who's obviously been a big prognosticator, says the market's headed. J-CAL, do you think Sax is, is right on this? Anything you're picking up from- Oh, yeah, sorry. I forgot to mention prediction markets. Yeah.

   6. DSDavid Sacks56:03

      Prediction markets have moved very, very sharply in favor of Trump. It's almost two-thirds, one-third now in favor of Trump. So there's been a huge move among bettors that Trump is gonna win.

   7. JCJason Calacanis56:14

      On polymarket?

   8. DSDavid Sacks56:15

      Yeah, polymarket and then Kalshi as well.

   9. JCJason Calacanis56:17

      Do you think it's over J-CAL?

   10. CPChamath Palihapitiya56:18

       I'll go with Nate. I mean, I think Nate's probably the best thinker on this, who I think puts a, a lot of effort into it, and if he says it's 50/50 with a slight advantage to Trump, I, I think I would go with his gut. But he's saying don't trust anybody. I, I don't trust the prediction markets, and I think the prediction markets are closing that gap as we get closer, 'cause they are easily manipulated.

   11. JCJason Calacanis56:42

       Yeah.

   12. CPChamath Palihapitiya56:42

       Polymarket is only offshore, right? The US market is not allowed to participate in polymarkets, so it's all foreign investors. Now, of course, Americans could be putting money overseas somehow and, and using foreign accounts to, to place these bets. I, I'm guessing if you were a sharp and you really wanna make money, that's what you would do. So I don't know what percentage of it-

   13. JCJason Calacanis57:02

       By the way, it was re- it was reported this morning that-

   14. CPChamath Palihapitiya57:04

       Oh, okay.

   15. JCJason Calacanis57:05

       ... a French trader has bet $45 million on Trump-

   16. CPChamath Palihapitiya57:09

       Yes.

   17. JCJason Calacanis57:09

       ... on polymarket, that he is the whale. He's a French national with "extensive trading experience".

   18. CPChamath Palihapitiya57:14

       Sure.

   19. JCJason Calacanis57:14

       He's not "manipulating the market", he just really is trying to build a big position. So he sounds like he's a pretty active trader that, uh, that's made the big move, but-

   20. CPChamath Palihapitiya57:21

       I mean, it, it's a crypto-based site, so you, you get the benefit of, like, you can track some amount of this on blockchains and then eventually find the person, but because it's crypto-

   21. JCJason Calacanis57:30

       Right.

   22. CPChamath Palihapitiya57:30

       ... as well, you can also hide yourself pretty well (laughs) with Tumblrs and other systems. So I, I would discount polymarket, uh, a bit. It's probably not as extreme as it seems, but it does seem like Kamala has not helped herself with the interviews. They haven't been great. And, um, you know, it, it is a toss-up and so it's, uh, ? Yeah.

   23. JCJason Calacanis57:54

       Any October surprise still coming? I mean, there have been a few attempts the last couple of days. I mean, it seems like the rhetoric from my point of view is getting-

   24. CPChamath Palihapitiya57:59

       The last 24 hours, there have been some really gnarly ones that we shouldn't give in- I don't think we should give any credence to.

   25. JCJason Calacanis58:04

       Yeah.

   26. CPChamath Palihapitiya58:04

       But some Republicans have been coming out talking about, like, a really gnarly one about the Republican side and ... I mean, it's not much more gnarly than other things that have been said about Trump already and judgments that ha- Trump has against him already for $100 million, so it's in that vein. But I do think that that looks to me like it's cap, and I think there's gonna be a lot of fake news, maybe even deepfakes that come out, you know, in the last week or two. So I, I think people should not trust anything they see on social media, be very careful with that information.

   27. JCJason Calacanis58:39

       I'll tell you guys my kind of view is, like, things seem to be getting more inflammatory leading up to the election here. It's like we've got 12 days left or, or whatever it is, and the, the rhetoric and the tonality of the stuff that's being said is getting so nasty on both sides. And, um, I just worry more about the reconciliation, reconstruction phase that needs to happen in America after this election.

   28. DFDavid Friedberg59:04

       Do you actually see it on both sides? Is it equal on both sides, do you think? That's your observation?

   29. JCJason Calacanis59:11

       Um, I, like, I, you know, I think, like, Trump leaning out the window of McDonald's and it was- I mean, I mean I laughed pretty hard when he was like, someone said to him (laughs) when they interviewed Trump when he was serving french fries and he said something like, "I've now worked in McDonald's 15 minutes longer than Kamala has." And then they, th- one of the reporters said, "Well, why do you think she would lie about that?" And he leans out the window, he says, "Because she's lyin' Kamala." And, you know, it's a funny joke, that's his quip, he makes fun of everyone. But I think the whole thing about making fun of everyone, it's such a different tone and a different rhetoric than I think what's gonna be needed. 'Cause imagine if she wins and, you know, he's painted her as being: you know, a liar, and crooked, and deep state. I mean, look, I'm not gonna try and-

   30. DSDavid Sacks59:51

       I don't know how you can possibly compare that to what the Democrats are saying right now, which is that Trump is literally Hitler.

Episode duration: 1:36:42