Is It Too Late To Invest In Nvidia? | Pivot

1. 0:00 – 0:32

   Nvidia’s volatile week and the bigger story than price swings

   1. KSKara Swisher0:00

      Another story that's really interesting, Scott, I, I noticed NVIDIA stock, they were talking about it here in Aspen, uh, it's been on a roller coaster this week. Shares are headed back up after multiple days of decline, which costs the company its title as the world's most valuable company. N- NVIDIA shares are still up over 160%, uh, since January. Uh, what do you think about this? Um, I, I think a lot of, uh, I think a lot of people thought this was coming. You, you talked about this a lot. Go ahead.

   2. SGScott Galloway0:27

      Yeah. But since it's rebounded 7%, it's not, uh, its ups and downs aren't that interesting. What's more interesting-

   3. KSKara Swisher0:32

      Mm-hmm.

2. 0:32 – 0:41

   When a 13% drop equals wiping out a Mastercard

   1. SGScott Galloway0:32

      ... is that when it loses 13% over the course of three days, um, it basically loses the value of Mastercard.

   2. KSKara Swisher0:40

      Mm-hmm.

3. 0:41 – 1:30

   The ‘magnificent one’: Nvidia as the tail wagging the market

   1. SGScott Galloway0:41

      I mean, if you look at the blast zone or ground zero of essentially two trillion dollars in incremental value creation over the last-

   2. KSKara Swisher0:48

      Mm-hmm.

   3. SGScott Galloway0:48

      ... six or 12 months, the knock-on effects are so dramatic. If this company, this company could go down to 80%, and all of a sudden, the NASDAQ and the S&P wouldn't be keeping pace with inflation. One company is now sort of as goes... I mean, it, uh, it used to be the Magnificent Seven, now it's the magnificent one. It's-

   4. KSKara Swisher1:07

      Mm-hmm.

   5. SGScott Galloway1:08

      It's the singular samurai, NVIDIA.

   6. KSKara Swisher1:09

      Right. Right.

   7. SGScott Galloway1:10

      So NVIDIA has now become the tail that's wagging the dog of almost everything, and I'm fascinated-

   8. KSKara Swisher1:14

      Mm-hmm.

   9. SGScott Galloway1:14

      ... by this thing because people just-

   10. KSKara Swisher1:16

       Mm-hmm.

   11. SGScott Galloway1:17

       ... can't imagine the kind of value creation here and what it means when it becomes so huge that, uh, in this volatile, it is th- I mean, the NASDAQ is effectively, the tone for the American economy right now-

   12. KSKara Swisher1:30

       Mm-hmm.

4. 1:30 – 1:56

   Extreme market-cap efficiency: $100M of value per employee

   1. SGScott Galloway1:30

      ... is gonna be directly and indirectly dictated by the volatility of NVIDIA. Even, uh, uh, for example, 30,000 employees, three trillion plus market cap, so you're talking about $100 million per person.

   2. KSKara Swisher1:43

      Mm-hmm.

   3. SGScott Galloway1:43

      Oh, jeez. Uh, I worked my ass off, got so lucky with L2, sold it for $160 million after executing almost what I felt like was perfectly having just an inc- incredibly lucky, just finally I did something-

   4. KSKara Swisher1:56

      Mm-hmm.

5. 1:56 – 2:34

   A sudden wave of employee wealth and ripple effects on housing

   1. SGScott Galloway1:56

      ... and I got, uh, all the moons lined up. $160 million, 80 people, so that's $2 million per employee. They've generated somewhere between 100 and $130 million per employee, and I would bet of those 30,000, 10,000 woke up, uh, last week and said, "I'm worth between $10 and $50 million."

   2. KSKara Swisher2:17

      Right. Right.

   3. SGScott Galloway2:17

      Which, what does that do to San Francisco real estate prices when all of a sudden-

   4. KSKara Swisher2:21

      Mm-hmm.

   5. SGScott Galloway2:21

      What do you do when you're 29 or 34?

   6. KSKara Swisher2:23

      It already is affected, you know that. We, we talked about that-

   7. SGScott Galloway2:25

      Is that right? (laughs)

   8. KSKara Swisher2:25

      ... luxury housing is way up. Mm-hmm. Uh, uh-

   9. SGScott Galloway2:27

      I mean (laughs) .

   10. KSKara Swisher2:28

       Uh, a, a lot of the tech companies and especially all the, and OpenAI, uh, everybody coming back, et cetera, et cetera.

6. 2:34 – 3:11

   The downside scenario: what if Nvidia fell 80%?

   1. SGScott Galloway2:34

      But when you have 10,000 people probably in their 20s, 30s, and 40s that all of a sudden have $10 million in incremental wealth, you gotta think two-thirds of them are thinking, "We're either gonna buy a nice home or a better home." Uh, I mean, "We're either gonna buy our first home or upgrade." What does that do to housing stock? I mean, there's just... And then what happens if this thing goes down 80%? It, it could, uh, NVIDIA could decide the pre- the presidential election if the market is off 2% instead of up 14, that is a huge talking point for, for-

   2. KSKara Swisher3:03

      Yeah.

   3. SGScott Galloway3:03

      ... the Republicans. This, NVIDIA has become a- As NVIDIA goes, so goes the market and the perception-

   4. KSKara Swisher3:09

      Interesting.

   5. SGScott Galloway3:10

      ... of the American economy.

7. 3:11 – 3:35

   Is it too late to buy Nvidia? Acknowledging uncertainty and extremes

   1. KSKara Swisher3:11

      So where, is it a buy now, Scott, for people who are like-

   2. SGScott Galloway3:14

      (laughs) This is-

   3. KSKara Swisher3:15

      ... you, you, you still can't do it?

   4. SGScott Galloway3:16

      This is literally-

   5. KSKara Swisher3:17

      It's a game. It's, it's a meme stock in a weird way, in a weird way.

   6. SGScott Galloway3:20

      This is, uh, th- I, I tell you what, I track everything. I get about-

   7. KSKara Swisher3:24

      Mm-hmm.

   8. SGScott Galloway3:24

      ... 76 emails a day from strangers.

   9. KSKara Swisher3:27

      Mm-hmm.

   10. SGScott Galloway3:27

       And the number one question I get is regarding young men, either-

   11. KSKara Swisher3:31

       Mm-hmm.

   12. SGScott Galloway3:31

       ... mom's looking for advice or young men themselves. The number two is-

8. 3:35 – 4:14

   Practical advice: buy the index (SPY) to participate without the stress

   1. KSKara Swisher3:35

      Mm-hmm.

   2. SGScott Galloway3:35

      ... "Is it too late to buy NVIDIA?" (laughs) People, a- and what I tell them is, "Look, I don't know." I can paint you a scenario where it doubles. I can see it getting cut by 50% if not 80%. So this is what you do, in my view. You buy SPY, you buy an index fund because if you buy an index fund, every dollar that goes into-

   3. KSKara Swisher3:54

      You're buying NVIDIA.

   4. SGScott Galloway3:55

      You're buying (laughs) 24-

   5. KSKara Swisher3:56

      NVIDIA.

   6. SGScott Galloway3:56

      ... cents on the dollar goes to the Magnificent Seven. So if those companies continue to kill it, you participate, but if the other 493 stocks have their day in the sun and those stocks get cut in half, you're still okay. So you take some upside off the table, but you save your mental health, you know you're participating.

   7. KSKara Swisher4:14

      Yeah.

9. 4:14 – 4:48

   Why index funds work: built-in screening and rebalancing

   1. SGScott Galloway4:14

      And the thing about these indexes that's so amazing is they are a screening mechanism for the best companies. So, so, y- you know, uh, whatchamacallit, uh, you know, who gets kicked out? Uh, uh, uh, Kodak gets kicked out, Salesforce gets brought in, right?

   2. KSKara Swisher4:30

      Mm-hmm.

   3. SGScott Galloway4:30

      So it's the best companies in the world you're investing in, and they do the job of balancing and diversifying for you. So anyways, you wanna invest in NVIDIA thoughtfully, you don't need to know whether it's gonna go up or down, buy an index fund.

   4. KSKara Swisher4:42

      Just buy an index fund. Good idea.

Episode duration: 4:48