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My First Million

The great USA reset: why I'm getting out now

Episode 708: Sam Parr and Shaan Puri talk to Scott Galloway about his wildest investments, plus advice for men in their 20s and 30s.

Scott GallowayguestSam ParrhostShaan Purihost

May 16, 20251h 4mWatch on YouTube ↗

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CHAPTERS

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Chapter summaries

Distressed investing and the FTX bankruptcy-claim trade
Scott Galloway explains why distressed situations have been his best-performing asset class and walks through a trade he made after reading the FTX bankruptcy filings. He describes how he estimated recovery value from the asset list and bought claims far below what he believed they were worth.
- •Scott says distressed investing has been the best asset class across everything he’s done in the capital stack
- •He explains how bankruptcy claims work: assets are sold and distributed pro rata to creditors
- •He read the FTX filing, focused on FTX’s investment in Anthropic, and estimated creditors would get significant recovery
- •He bought $10M in claims for about $2.2M when claims were trading around 22 cents on the dollar
- •He says the trade benefited from both diligence and luck as asset values rose
How to buy bankruptcy claims (and the real operational risk)
Prompted by questions from Shaan, Scott details the mechanics of buying claims: finding a broker, verifying ownership, transferring claims legally, and managing fraud risk. He shares a dispute where a claim was allegedly sold twice and how recognition/filing timing mattered.
- •Scott found a market-maker (Thomas Brazell) and structured compensation as a share of upside
- •He outlines the diligence burden: confirming a seller truly owns a claim and completing legal transfer
- •He notes the process involves wiring money to third parties and accepting operational risk
- •He recounts a case where a seller sold the same claim to multiple parties and Scott fought to keep it
- •He emphasizes this work is why distressed can offer outsized returns—most people avoid it
Why “unsexy” investments can outperform (plus a painful covered-calls mistake)
Scott argues that the more glamorous an investment is, the lower the returns tend to be, because crowded trades compress upside. He contrasts that with a recent error where he sold covered calls without doing enough diligence and missed a big move.
- •Scott’s investing maxim: the sexier the asset class, the lower the returns
- •He says distressed opportunities are ugly and complicated, which is why they can be mispriced
- •He shares a personal mistake selling covered calls and leaving large gains on the table
- •He frames the loss as a due-diligence failure and a reminder he gets things wrong often
- •The hosts push back on calling the FTX win “luck,” highlighting the work involved
NJOY: buying a vape company out of bankruptcy and enduring the reputational low point
Scott tells the story of investing in NJOY after it was brought out of bankruptcy, motivated partly by smoking cessation and his family’s experience with smoking-related illness. He describes the darkest period during the vaping backlash and his personal guilt while staying involved as the company pursued regulatory approval.
- •Scott invested $2.5M as NJOY was brought out of bankruptcy on a regulatory-focused thesis
- •He contrasts NJOY’s positioning with other players accused of marketing to kids
- •He describes “popcorn lung” headlines and the moral conflict it created for him
- •He resigned from the board at a low point and tried (unsuccessfully) to sell his stake
- •Leadership stayed committed to an FDA approval path that required major spend and time
NJOY outcome, “guilt tax,” and pairing wins with losses
Scott explains that NJOY ultimately achieved regulatory approval and sold for a large sum, producing a roughly 30x outcome for him. He also notes he gave away a meaningful amount due to guilt, and balances the story with a fast, total loss on another investment.
- •Scott says NJOY sold for about $2.2B, turning his $2.5M into roughly $75M
- •He calls it a classic “hair on it” investment: long, uncertain, and nearly went to zero at points
- •He says he gave away $25M as a personal “guilt tax”
- •He cites another investment where he put in $5M and it went to zero in 18 months
- •The pattern: huge upside can coexist with frequent, painful mistakes
Dex Media / Yellow Pages: consolidation, cost cutting, and a transition to CRM software
Scott recounts an investment in Dex Media, a Yellow Pages business with strong cash flow but steady decline. The strategy relied on acquiring similar businesses cheaply, consolidating operations, and shifting the core relationships into software offerings.
- •Scott describes the business: large revenue and EBITDA but declining around 12% annually
- •He explains buying Yellow Pages businesses at low EBITDA multiples due to pessimism
- •The playbook: consolidate, close HQs, keep top salespeople, and cut costs faster than decline
- •Management transitioned toward CRM and related tools for small businesses
- •Scott says his return was several multiples and that the industry’s “uncool” nature helped pricing
Human capital lesson: the economics of choosing “romantic” careers vs boring ones
Scott generalizes the “unsexy wins” idea beyond investing, arguing that labor markets pay more for excellence in less glamorous fields. He contrasts the financial prospects of tax law with acting, stressing that “psychic return” may be the real payoff in passion careers.
- •Scott argues financial returns are often higher in boring industries than in glamorous ones
- •He contrasts outcomes for top performers in tax law versus top performers in acting
- •He notes many actors struggle financially even at high levels of credentialing
- •He frames the tradeoff as money versus psychic reward
- •Shaan challenges with the mindset of aiming to be in the very top tier regardless
Index funds for most people—and Scott’s prediction of a long U.S. market downcycle
Scott says most people should default to index funds unless they have unusual access or expertise, and he emphasizes geographic diversification. He then lays out his view that the U.S. market is poised for a decade-plus period of underperformance driven by valuation and political/regulatory damage to confidence.
- •Scott says his deal access expanded mainly in the last 10–15 years
- •He advises most young people to use index funds unless they have rare edge or deal flow
- •He argues U.S. index exposure isn’t truly diversified if it’s concentrated in the U.S.
- •He predicts the U.S. could go flat or down for 10–15 years, implying multiple contraction
- •He says he’s shifting holdings toward Asian and European exposure and companies with major non-U.S. revenue
Mental health, time, and “freedom” from public judgment
Scott discusses how health reframes priorities and shares stories about friends’ sudden illnesses and death. He reflects on the gap between financial freedom and the deeper freedom of not being controlled by shame, public opinion, or the need to constantly qualify his views.
- •Scott shares a Buddhism-related line about health reshaping what problems matter
- •He recounts friends dying unexpectedly and the urgency it creates to enjoy the present
- •He describes “true freedom” as escaping conventions and fear of being shamed online
- •He explains he still edits himself to avoid backlash from extremes and feels not fully free
- •He says he wants his work to catalyze productive conversations even if he risks being wrong
The “inverse Galloway index,” online outrage, and who he admires
Scott responds to the idea of an “inverse Galloway index,” acknowledging that online criticism can still shake him, even as he’s learned to engage less. He then names writers and thinkers he respects for discipline, clarity, and market insight.
- •Scott says some of his worst mental-health episodes started with online comments
- •He describes handling comments by limiting engagement and recognizing bot-like accounts
- •He says leaving X helped reduce the emotional impact
- •He cites Sam Harris as someone he admires for discipline, thoughtfulness, and fearlessness
- •He also mentions several finance/media voices he finds inspiring and educational
2025 theme: capital flows reversing out of the U.S. and toward Europe (plus specific bets)
Scott lays out his central theme: after a long U.S. run, he expects capital to reallocate abroad, with Europe particularly attractive because it’s widely dismissed. He explains he’s still tempted to pick individual stocks and describes a few example positions and rationales.
- •Scott says his 2025 theme is reversing capital flows after an unusually long U.S. bull cycle
- •He argues Europe looks attractive precisely because it’s been “left for dead”
- •He contrasts high U.S. valuations with slower growth in some marquee companies
- •He describes an investment in a VTOL company and frames it as part valuation and part interest in transportation
- •He also discusses a thesis around increased European defense spending and broader stimulus effects
“How does one ball?”: returns, stress testing, and a real estate strategy built around inequality
Scott jokes about wanting to be a “baller,” then gets serious about focusing on not getting poor and stress-testing his portfolio. He argues inequality will worsen, describes “transnational oligarchs,” and explains why he concentrates real estate in a handful of global wealth hubs.
- •Scott says he’s less focused on getting rich now and more on avoiding becoming poor
- •He describes stress-testing scenarios like a major equity drawdown or real-estate crash
- •He claims inequality will keep worsening and describes an emerging class he calls transnational oligarchs
- •He outlines a strategy of owning high-end property in a few places he believes the ultra-wealthy cluster
- •He adds a personal motivation: homes in desirable places make it harder for his kids to avoid visiting
Advice for young men: relationships, asking people out, and building “game” through rejection
Scott warns that many young people won’t have the same access to prosperity, relationships, and family life, and he cites troubling social stats about men and loneliness. He urges young men to seek “no’s” by taking initiative socially and professionally, and he ends with practical, playful suggestions for starting conversations.
- •Scott says prosperity is not evenly distributed and many young people can’t reach traditional milestones
- •He cites loneliness-related risk for men and says men rechannel romantic disappointment in harmful ways more than women
- •He shares a stat that many young men have never asked someone out in person and frames initiative as a differentiator
- •He recommends adopting a mindset of collecting “no’s” to reach meaningful “yeses” in work and dating
- •He closes with humorous, concrete openers meant to help young men approach strangers respectfully

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