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Hey everybody, Merry Christmas. Happy holidays. It is the end of 2022 and once again, we're doing our Bestie Awards. Yes, at the end of the year, we do our Bestie Awards. This is where we give awards to the biggest winners losers and many other categories that you love with me again. Of course the Sultan of science Deep in his Kurosawa Vibes, how are you doing Sultan? It was great to see you guys for dinner last night's acts. We missed you That was a lot of fun. We all got together twice this week for dinner while we were on vacation and During our dinner we took a vote and sacks you are now the director of the all-in summit Congratulations. Yes, congratulations. Yes, the Griff design. Good. My first act is to veto it Okay, sorry to the fans also with us of course is the dictator himself Pauli Hoppatiya deep in his turtleneck phase and his vibes tell us about your winter vibes Bestie I mean, I can't believe that we all took over Lake Tahoe for a week together It's cool. It's been a lot of fun. I got to say sacks. You'll be surprised. J. Cal has the life hack of life hacks here He's figured out how to basically get everything pre-wired All the restaurants all the reservations. It's been great. I've loved it. We've had a wonderful time It's an eight person table for every night and he does it what months in advance So every night you got a box out every two weeks out. I get a table V8 for five six nights in a row And then I invite my besties out and oddly it turned out there's only one person from Jake House I just have Yes For the rest of us to show up We had a wonderful time. I picked up the check for the nachos and Chimath brought $6,000 worth of wine. I brought my own also To the restaurant yesterday so we could open the line properly. It was wonderful. We've had a wonderful time and Of course with us looks like he had to work over the Christmas break Sacks. How are you doing brother? You're working today. I'm good. I'm Singing out somewhere. Well, come on. You could be honest. You're at the Twitter HQ I recognize that incredible architecture and design they spent so much money on that office space Beautiful. That's definitely beautiful office. They got their own the spoke coffee shop here called the perch We're the people that work there So let's get started with our bestie awards. This is a very controversial we start with a political award And last year, you know, this is our just so we're clear. This is not the prediction show that next week will be the prediction show this week is our winners Q the music. Yes, Q the music Okay, here we go 2022 predictions. This is what we predicted for the Bestie Award for biggest political winner I said Ron DeSantis and so did David Sacks. We predicted in 2022 After me you said it after me and the way you introduced it you said what did Tucker Carlson's writers come up with I said DeSantis and then you said DeSantis. Are you starting already? Literally I'm trying to give you your flowers. I'm ready. I'm ready to take Okay, take it easy. You're going to get your flowers So Ron DeSantis obviously a big winner So those were those were great predictions Freeberg With a wild car there he predicted Putin would be a winner in 2022 That one fell a little flat did it not our friend freeberg not a winner. No, I think he You know, I mean my projection was really built on well, I thought would be a big kind of influence that he would gain this year You know whether he's viewed negatively or positively He's certainly at the center of the stage right now now Chimath your 22 prediction This is your prediction last year for this year was that the biggest political winner would be Xi Jinping Okay Now we go To our actual biggest winner This is where we tell you who we thought was the biggest winner of 2022 Let's start with you sacks Who is your biggest winner for 2022 political biggest winner? This was the prediction that I nailed as as you mentioned it So the red wave physical or else, but it crashed over Florida hard So DeSantis is my pick he won re-election by about 20 points And his co-tails carried four new GOP house seats which happens to be the exact size of the GOP majority Uh several polls have now shown him beating Donald Trump by significant margins for the 2024 GOP nomination He is shattering fundraising records for it is now the fastest growing state So he is my pick for the biggest winner uh political winner of 2022 great Who is your biggest political winner? Chimath I mean it would obvious it's Xi Jinping You know there is no Single person in the world that is now as powerful as this one meant he Has complete authoritarian control Over 1.2 odd billion people and 20% of the world's GDP and a large amount of the world's debt including a lot of US Dollar debt And so you know, it's pretty There's there's it's hard to find anybody that won nearly as much as he did Okay now to you freedberg who is your biggest political winner of 2022? I mean I think your DeSantis and Xi Jinping calls were Really like good I think the biggest surprising winter for me is like you know unexpected and that would be Zelensky From the Ukraine. I don't think going into this year People paid as much attention to him. He was certainly not a song hero But coming through this conflict and I think leading the storyline About our common enemy of the West Um and common enemy of democracy being Vladimir Putin Really kind of made him a superstar and a hero on a global stage And I think that's evidenced by the fact that he's in the White House Any gave an address to the US Congress yesterday So I would make him kind of the biggest winner of the year. It's hard to go against DeSantis. So um, you know, he he clearly Uh has as sacks correctly pointed out gone into the lead. We'll see if he can be trump in the primaries I have my doubts, but um, he does seem to be pulling in some of those moderates, right? I don't understand why you guys say he's a political winner. What did he win? He hasn't won the nomination yet He got reelected to a state that he had before 2022. So what did he win exactly? Well, I think a couple of things one is when he won A election to the governorship four years ago. It was by less than one percent. It was a tiny margin of victory This was margin of almost 20% he had coattails and he is now the front runner for the GOP nomination in 24 I think you can argue you can make the case that maybe he's peaking too soon Well, I'm glad you brought that up because if you look at the data, you know I think in the last Seven or eight nomination cycles the person that's been leading the popularity contest going into the aisle caucuses has not won the nomination He's peaking too soon almost that's a possibility Because when you're the front runner everyone takes shots at you on the other hand He if he stays this dominant he will drive out Other contenders out of the primary and he may be able to solidify it and if if it can just be to santa's versus trump in the primary He has sands much better shot than if it's trump versus a bunch of other Challengers and I think that if he continues To pull this well within the Republican party. I think trump might not run again because trump definitely does not want to risk being a loser in the Republican primary So yeah, there's always front runner risk, but it's hard to say that coming out of this year that he wasn't a huge political winner Okay, if we're gonna challenge other people's picks. I would maybe challenge the zalinsky. There's no question That he's been a global media hero But two-thirds of Kiev is currently without power 80% of Kiev doesn't have water 30% of the Ukrainian power stations have been destroyed nearly half of the countries without power There's something like eight million displaced Ukrainians in the country and over a hundred thousand Ukrainians have been killed in this war So yes, he's been a very strong charismatic war leader for them, but freeberg your response. I'm not advocating for his performance as a leader. I'm advocating for his Accumulation of political goodwill. That's it. Okay, and he is winning the war So Well in in war they say there's nobody wins But it's certainly better than having your country taken over by Putin. So some would argue that's winning Let's go to biggest losers biggest losers in 2022 we predicted again. This is our predictions from last year and then we'll go on to our actuals for this year Last year we predicted Chimalt said the progressive left Sac said Nancy Pelosi freeberg you said us influence globally interesting and I said the extremes both Biden and Trump Let's go with our predictions. I'm sorry with our actuals for this year Chimalt want to Hugo first this time who is your biggest political loser for 2022? I mean, I don't think it's as written about as much, but the progressive left did see as much failure as the MAGA right So they were a huge loser. I mean to the extent that anybody thought that leftist you know quasi-socialist policies and politics was a winning strategy. I think that was pretty soundly refuted even in places that were Pretty staunchly Democrat. It was really difficult for The progressive left to do much of anything but lose So I think that was a really powerful and important repudiation And I think it it's marginalized as them to a bunch of you know, kooks almost And I think that that's really healthy for politics going forward So your prediction and your actual are going to be the same then yeah, I think it I think they were the biggest political loser in the United States at least Okay, yeah Elizabeth war we don't hear people talking about Elizabeth Warren or Bernie Sanders much This year Yeah, and I think that the biggest political loser outside of the United States Was probably the European Union. Got you want to expand on that a little bit if you just think about the corner that they painted themselves into How much they had to basically literally Go 180 degrees away from what their policies were you know, there was a huge raft of whether it was Green ESG kind of woke liberal politics that manifested itself in all kinds of National security decisions and energy decisions that in this last year they literally had to undo in order to stay alive and That makes that whole Political construct I think very fragile So they were they were a pretty big political loser outside of the United States. Okay, sacks Could be hard here to guess this one, but sacks who is your biggest Political loser in 20 22. I have no idea who you're going to pick here by the way I got policy right last year that she did lose the gavill So you've got to say that the war in Ukraine was the biggest event of the year and Obviously you can spread the blame around to a lot of people starting with Putin because he's one who ordered the invasion But I would say this is a slightly different take on the category which is biggest political blunder occurred on January 27th of this year When Blinken said that NATO's door is open and must remain open and that is our commitment He basically shut the door. Hmm. He kept NATO's door open, but shut the door on any means of a diplomatic Off-Ramp to end this conflict by promising Russia that Ukraine would not become part of NATO That was the single biggest diplomatic blunder of this year or maybe The last couple of decades because there's a good chance we could avoid it this disastrous war If we had just been willing to close NATO's door wonderful great crisp answer. Thank you for that nice and tight Friedberg who is your biggest political loser for 2022? It was a tie for me between Jerome Powell and Liz truss Liz truss just has to get recognition here for only being in office for 45 days as prime minister of the United Kingdom I mean, I think that is cannot be overlooked the That some of the policy and folks that she put in In office caused you know massive chaos. It was just a clear dysfunction over a very short period of time Jerome Powell I think this was a big surprise this year to see how the Fed chair became So politicized and his role became so politicized both kind of the left and the right Finding reasons to question his leadership On his decision making the failure to raise rates soon enough led to massive inflation is what you'll hear from one contingent of politicians and the public at large And then the rate at which he's raising rates now to catch up to the to common inflation is causing people to complain on the other side So there is really no one that seems to be happy with Jerome Powell and I think that that that was a Shooting star that seems to have completely lost its luster. Okay, so the Fed yes good pull there Okay, mine is pretty clear and objectively it is of course the GOP the red wave failed it turned into a trickle Trump is back and I believe there's a good chance he will win the primary Roe v-weight a complete unmitigated disaster for Republicans. They caught the car and plus Marriage equality and having to deal with that women and the LGBT community vote and they have long memories The GOP the biggest political losers for me Okay, I'm sure Saks has never been all there so we will move on to the next category Uh, which is oh by the way if you say it that way then you know the biggest political loser in 2022 were women look at like fundamental human rights were stripped away From 50% of the population so that's not cool And they could have left it alone and they could have left it Well, if if what you mean is that the issue was sent to the states and each state then it gets to the side Then you're right, but eat but if you look at the battles have happened at the states even red states like Kentucky and Kansas Have rejected the the subsequent political push to outlaw abortion So it has not turned out to be just by the fact That all of these red states basically reconfirmed and enshrined a woman's right to choose May actually go more to show that the supreme court is totally out of touch and that they didn't need to touch rovy weight And the fact that they did opened up you know a huge can of worms in 50 states that now go and need to go and adjudicate this thing Where it looked like actually that decision Even back in the day even though the way that it was done You know, there was a lot of room for improvement clearly everybody agrees with that But was actually after you know 50 plus years reasonable law And so now that you took that law way now folks even in the red states are like no it was fine Which means that this whole thing was a huge political gambit more than it was actual societal intention Okay, so we are going to move on now. I just I'll add my final two cents to that As I said, I do think women and the LGBT community have very long memories and the people who are in the moderate are not going to forget How they were treated by the GOP in this specific issue So biggest political surprise we didn't do predictions last year But I'll just run down what everybody said was their political surprise I said the fact that Kamala Harris was sidelined was pretty surprising to me and that's continued Shemoth you said Joe Manchin was your biggest political surprise Glenn Junkin Winning sacks out with your biggest surprise and freedberg A January 6th crowd making it into the capital during the insurrection was your biggest Political surprise. So here we go our 2022 biggest political surprise sacks. Let's start with you You have a lot to say about politics go well the biggest political surprise to me was no red wave So I admit I got this prediction wrong, you know, I got all my previous ones right Jake house. I'm gonna admit I got this one wrong You know, I believe that the electorate would focus on the fundamentals three quarters of the country thought we're on the wrong track three quarters Think we're in a recession Nevertheless, their Republicans did not do nearly as well as predicted the only gain nine seats in the house They actually lost the seat in the Senate and I think that that had something to do with candidate quality and of course the whole election denial narrative Basically was a disaster for them I hope that the Republicans move on and stop talking about the past what voters want to hear about is the future Rebirth did you have a biggest political surprise for 2022 freebro? Yeah, it's also the failure of the red wave. I mean that was my my pick I think the consensus going into the election was with You know rising inflation and the Distain that everyone had for the way politicians kind of managed us through COVID and then managed us through the economic recovery It's uh, it was inevitable to see a flip and it didn't happen. I think obviously we talked about why that is But that was a big surprise for everyone Jamal what was your biggest political surprise of 2022? Jamal Pauliapatia the absolute toothlessness of mega and Donald Trump. I mean he was Just a scarlet letter if you were anywhere near this guy you were gonna lose And that's surprising considering how traditional Republicans were pandering to him up until frankly just a few months ago So I think that we exposed the emperor of as having no clothes and that he marginalized and sidelines candidates Into a fringe following that cannot go mainstream that was a it was really surprising to see how stark that was this year I Fantastic I'm going to build on your schmoth. Uh, I had two here number two was roby-waited, but we've beaten that uh, I think and we discussed Discussed it as much as we possibly could my number one building on your schmop is that despite What's happened with trump the documents the the uh his cases in the United States and New York Uh, and about taxes despite all of this the January 6th insurrection despite all this Trump is still viable. I can't believe he's still viable and that he is gonna be out there In the primaries and he's gonna have to debate To santa's and I don't know that to santa's can beat him in an debate. I think he might Uh, win. So this is completely scary for both me and sacks. I think it's terrifying sacks is nightmare and mine Well, I think he's mainly viable in the minds of the maggot dead enders and the mainstream media Who want to keep him alive and the binoculation wants to keep him alive and I'll do anything to keep him alive And in the news and you love keeping him in the news. So it's a yes It's a co-dependent relationship between the mainstream media which you sometimes front for and trump. Oh be careful telling me what I think And the end of the dependency jcal Well, I wish the Republican party would finally take ownership of this disaster that is trump and tell him that he has no business But you guys keep him in the game and the fact that he's viable again your personal nightmare and mine Okay, biggest business winner everybody excited to get off politics right now and get to our killzone, which is business so last year We had predictions in this category. I had said Disney that's an up and down prediction. I'll get into that in a moment Tramoth you said small and medium-sized businesses the old SMBs Sack said rise of the rest the flyover states And freeberg you said stripe Tramoth let's start with you SMBs. What did you get right? What did you get wrong here? I mean I whift it just completely missed the global macro shift that We embarked on in full force Starting in q1 of this year. It was it is the most important business story of the year It's just like we have an absolute complete regime change and by the way that regime change is so complete and so you know Thuro that it even touched Japan just a few weeks ago or sorry just a few days ago where Japan who find you know Finally yielded on this idea. You're gonna work and have negative interest rates and yield curve control Even they finally broke in it and raised rates So it is an absolute worldwide sea change in how we need to think about risk and I think that's worth talking about A little bit later in the show, but that was the single biggest business story of the year I'll add to what you're most said I missed this too even though on another prediction when you ask what the biggest business loser would be I think I said that it would be asset classes that have been pumped up by the feds money printing because You know that now that so I got that part right but what I didn't connect it to Were all the asset classes actually got pummeled so I kind of conceptually understood that rates were rising But I totally underestimated the magnitude of the shift the way that gross stocks we get hammered the way that crypto would get destroyed the fact that like tiger basically got blown out of the industry I mean I had the right general intuition, but I Didn't translate it into the specific asset types and the magnitude of the shift and also the like what you're most said a real regime change now And how markets are viewing stock performance It's really incredible freeberg. Let's get in on this. This is somewhere where you can contribute deeply What do you think about your take last year and you still believe in stripe? Yeah, I mean look it's a it's a business that obviously benefited greatly from the pandemic and the adoption of You know the payment processing infrastructure that they build across their across various kind of e-commerce platforms. It's I've been I'm not an investor so I don't have any numbers But there are public reports that have highlighted that the revenue increased 66% this year They've indicated that they're probably going to experience significant revenue slowdown with the recession ahead But it still seems like a super high quality business and you know valuation-wise Who knows what things are going to be worth when they ultimately come to market? There's certainly no one going to going public right now So at some point we'll see you know whether valuations play out of it seems like a continues to be a very strong What one of the strongest private businesses that's being built in Silicon Valley? We will get to 2022 Biggest business winners in one second. I will just say for Disney have Man, what a swing Bob Chapic in and then out and now Bob I go back So I feel like I got this one wrong and right at the same time I still believe in the company deeply. I think they're gonna have a big win Let's get to our actual biggest winner of 2022 Sax why don't you lead us off with your biggest winner of 2022 for business? I said Lockheed Martin along with other defense stocks Lockheed Martin which makes javelins and high mars is up 40% in the past year when most the market's been weighed down Northrop Grumman's also up almost 40% And even some of the lesser performers like Raytheon and General Dynamics are up about almost 20% in a terrible market environment The fact the matter is war is terrible, but it appears to be good business We've sent so many weapons to Ukraine that there's recent press reports that are the US stockpiles of missiles Javelins and stingers are now depleted So these companies are gonna keep doing well for the next year at least now. There's a new appropriation sailing through something like 44 billion of new funding for the war. It's now over a hundred billion dollars McConnell Says this is a Republican's number one priority. This is now bipartisan concern And if you think the war is expensive just wait for reconstruction. That's estimated to cost at roughly a trillion dollars to build Ukraine back. Sax, can I ask you a question about that? Are these when we fund these wars? I've heard different versions of this can't get a clear answer When we provide weapons and systems like this are they not on account and we ask for money back at some point? Do you know the answer to that question? You think we're gonna get money back? You're kidding me? It seems to be sometimes that we do so that's why I was asking. I think it's something that has been clarity on look I think the the war has been phenomenal business for the military industrial complex That's what we're seeing here Not so great for the rest of the economy Freiber what do you got? Yeah, I mean, I think you guys will remember last November I predicted energy and defense to be the best performing Stocks for this year sex is right. I think defense is up 40 percent. So I kind of went with the bigger oil and gas companies are up You know across the board about 47% in terms of equity value in the public markets a year-to-date Compared to the S&P being down about 20% So over the short term I would argue oil and gas companies, but I think that over the long term there were a couple of big Breakthrough moments that I would give kind of you know the winner in business that will benefit over the long term to open AI and to fusion startups And we'll talk more about why For those two obviously later when we get to the biggest winner in tech and science But yeah short term oil and gas they benefited from the supply constraints and the conflict in the Ukraine And the longer term I think open AI and fusion startups. Well, and by the way, I mean just just to give free personal credit here You actually predicted the war or you predicted a war. I don't know if you predicted this war But you pretty yeah, that's what I predicted. Yeah, I predicted the war and Putin Kind of rising to the center stage and the defense energy dog That was a huge prediction because I don't think most people even most analysts Well, they were surprised even when the invasion happened I think people are still very surprised both that Putin would order it But also if you study the situation, I think you got to be surprised that we didn't negotiate harder to try and prevent it I traded it too. I bought I bought an energy ETF. So it worked out for me. Okay, Chimathi or biggest business winner of 2022 I Nick can throw it up, but it's basically any single person that understands the following formula So if you this is the This is so good. This is the This is the capital asset pricing model. So what is this? This is like before you make any investment What it actually tells you is here's the rate of return that you need to generate Right above the risk free rate in order for you to justify making that investment and If you really understood the capital asset pricing model going into 2022 It would have been difficult for you to not make money Because all of a sudden as the 10 year flexed up and as you know the volatility particularly of things like tech stocks went crazy You could have figured out where you to park your money And all these people that have built businesses around this capital asset pricing model So you have companies obviously. So you know you have sectors of the economy like defense or Energy stocks Consumer goods and staples. They all had moments where they all did well But if you take it one step above The organizations that actually ran big macro books or really understood how to algorithmically implement This capital asset pricing model just ran roughshod over the markets And you know said in a different way. It's sort of my background, which is you know If you understood the capital asset pricing model you would have been a massive bear and the bear got fed this year to a degree that none of us could have anticipated Okay, so am I correct saying the capital asset pricing model is the biggest winner or no people that understood it But people that understood it got it. Okay, and for my biggest winner I went with chat GPT slash open AI and their partner Microsoft. Why did I pick that as the biggest winner? Well on my other podcast as we can start up so we played a game chat GPT versus the first result of Googles and Molly and I could not tell the difference and in fact we picked chat GPT's answers Often above Googles Google one of the greatest businesses and franchises ever created has no answer at currently for chat GPT because Google's business model is to get you to click on an ad between links if you give the actual answer Then the person doesn't stop clicking if they stop clicking Google stops making money. There is no business model in search if the person gets their answer because they're done This is an existential threat like we have not seen and our friend Sam Altman has a line chat GPT slash open AI with Microsoft Microsoft I think is going to release a and there's a prediction as well a search engine with Open AI that has a significant impact on Google's franchise. We didn't think this would ever happen and it's here. Okay, the biggest losers in business We made predictions last year. I said in 2020 I predicted in 2021 the biggest loser in 2022 would be crypto By the way, Friedberg you agreed with me and we nailed it So you agreed you agreed with me. Well, yes, that's correct. We were in agreement. How about that? We were in agreement. We were in agreement. Sax independent You said and Chimoff visa slash mastercard will get into that and sax you said asset classes benefiting from government pumps Very interesting the Fed stopping QE interesting anybody have comments on their predictions or each others predictions from last year on a percentage basis David absolutely nailed it sacks absolutely nailed it on a dollar basis the biggest business loser of this year was big tech And I think that you saw Three things happen, which I think are important for the future. The first was It was the most crowded trade both by professional money managers as well as retail and that fever finally broke in the last half of In the second half of this year and now going into Into these last few weeks you're seeing a lot of panicked Selling to cover losses and other things so I think that um Number one that happened number two regulators basically said we're gonna go after these guys every single which way we can And then number three I think it started to change the innovation cycle where people now actually believe that they can't Outspend because folks won't tolerate it and the things that they're spending their money on Seemed kind of foolish and so I think the you know big tech is probably not discussed enough But it was a huge loser for this year in terms of what happened to them 2022's actual biggest business loser trimots has big tech freeberg who is your biggest business loser for 2022 I mean this one's just a simple FTX. I mean that was such a incredible Revelation of the scale of the scam and the fraud and the craziness that went on and I think what was interesting about FTX Is it had implications not just for crypto and not just for kind of offshore regulatory and not just for fraud But also for the investors we had a whole debate about whether the press and journalists failed to kind of You know appropriately investigate this guy rather than give him accolades because he said the right things Which he said he did over I am and investors failed to do relevant amounts of due diligence or former board and have proper governance over him Because they wanted to be part of the hot new thing and everyone had capital to deploy And I think what was interesting about the FTX failure is it didn't just It wasn't just a failure due to fraud, but it revealed so many parts of kind of You know I call it You know systemic laziness and and systemic kind of blind eye and systemic bias Uh that allowed and enabled this to happen It was really a revealing kind of failure And that's why I kind of gave it the the award mr. David sacks who is your biggest business loser of 2022 Well, you kind of mentioned this uh, I picked Bob Chaypeck is the former Disney CEO He was iGur's handpicked successor three years ago then the pandemic hit which shut down the theme parks Then I think the big mistake was allowing himself to be malmout by woke employees into picking a fight with DeSantis over the so-called don't say gay bill Uh that caused DeSantis to retaliate by threatening the special privileges that Disney enjoys in the state and then he had iGur undermining him behind the scenes. This is revealed I think it was in a Wall Street journal story That he was grousing to insiders that chaypeck was not soliciting his advice and he was undermining confidence in with the board and Recently chaypeck was forced out and i was put back in charge fantastic choice for the biggest loser How brutal does iGur look in that Wall Street Journal? He's i mean Would anybody work for him? Yes, he is incredible. He looks terrible. I agree. I read that piece twice actually The cf o calling him up. She was the one who stabbed him uh, you know in knife to uh, Chaypeck It's a great Wall Street Journal. I don't think that i don't think that that happens without the Support of the person waiting in the wings Hey listen, there's a couple of jobs you never quit you never quit a hit tv show you never quit a hit band Like Roger water. It is we're paying for why didn't they just extend this retirement? The Disney job is the best job but that's the job in the world But Jason why go through never quit? Why go through the theatrics of like grooming somebody putting them in Your job and then undermining them like i all i'm saying is if you're a good i think you made a mistake I think you made a mistake he quit and he wanted it And also if like if you're a good up and coming exec I mean what do you do if like all of a sudden like you know you have the opportunity to get groomed for that job It just seems really Risky Yeah, I mean I think Bob Iger realized when he in that piece they say he went on his yacht his wife didn't come with him The Wall Street Journal piece is incredible and he's got bored and he's 70 something years old He's almost like in early 70s Why would you give up the greatest job in the world? So he went back and he took it back Didn't Disney have a mandatory retirement age But this is my point is he was so he was so prolific he could have extended it Why not just extend it and be done with it? Yeah Did you guys read the book he wrote? Uh, that Right, right, right, right, right, right? What is it? Yeah, and I think that what was interesting about that book Was the entire thing was built around a series of deals that he did It was like I did this acquisition and I did this acquisition then I did this acquisition And everything for him was building this this this empire by doing deals And someone whose storyline and narrative that they tell of themselves That's built as a series of deals is a deal junky And you're not going to be a deal junky where where that's your excitement That's the thrill that's the adventure that you get out of life And then you go and sit on a yacht you're not doing any deals sitting on a yacht And you're going to want to get back to that and I think it's less about kind of Management and product and it was much more about being in the midst of doing deals Uh, that's probably why he came back If this was part of Iger's diabolical strategy get back Let me just say like one of the ways he did it. I mean Chatepac had the right instincts Which is when this whole Florida debate happened over don't say gay highly contentious No comment Like no comment his instinct was just a state out of it But then Iger made some statements about how companies have to live up their values and not gun stuff And then the employee started you know again You know And malmowing him to get involved and he took the bait And he got involved and what he didn't expect Is that DeSantis wasn't going to disroll over DeSantis hit him back really hard and it cost them economically And then the whole thing is reveled And in the first interview that Iger gave when asked about this question he was like no comment He went Yeah he's like we're not going to get involved in politics anymore We're not going to get involved in politics anymore It was hilarious That was in Well, it's Chatepac to basically get involved in politics And then Chatepac basically became cannon fodder for DeSantis Exactly And then I just like Oh we're out of this now I mean how did I have a ball? Oh it's absolutely Absolutely So dirty The other two things were Chatepac said we're going to take away your PNLs to each of the leaders That is like just neutering them That he basically said everybody's under the CFO Everybody's going to be on one PNL That infuriated all the creatives And then he went to war with Scarlett Johansson over A $10 million settlement for her black widow He couldn't handle talent He couldn't handle the politics and he wanted to control everybody's PNL Just unforced error after unforced error Congratulations to my guy bye bye Gry on the stock Do you think he was diabolical at all? Oh in the best possible way In the best possible way which means the Disney stock is going to go up Yes I'm buying more Disney stock this year Is all the the woke progressive politics that he projects Is that all just a game to mask what a viper's nest Their executive suite really is Are you telling me that Disney is a political corporation After Eisner and Bob Eiger and all of his Michael Ovidts I mean it's the history of Disney It's the greatest job in the world It is Game of Thrones to get that job And Bob Eiger got it back He's my guy I'm sticking with him Okay And they have the best IP in the business I don't care how he gets that job back He's awesome I gotta say the IP at Warner Media is a real strong contender I mean that's the way it is We were talking about this yesterday How good white Lotus as season two was All right let's open up the reddit It is incredible how HBO produces Extraordinary hit after extraordinary hit The quality and the consistency of that quality Coming out of HBO is like nothing else You'll go I mean look Avatar 2 I did not like Avatar 1 I thought it was junk Avatar 2 is getting pan for being junk as well Not everything that comes out of Disney is a hit They certainly have the best franchises But man Warner Media has a lot to contend with And you know they could end up being a real challenger To Disney in the years ahead Saks did you watch the white Lotus season two Yes sir Sorry I have a gun We no problem it is absolutely fantastic We have to do a little fan service here What did you love Tramouth about white Lotus season two Give the fans a little service here But wait it's on season two I didn't even see season one I don't even know what you guys are talking about Okay it's the how the how to show Intellivision Well I'll tell you what's incredible Is there's a diversity of characters And they weave the super like you know Interesting story together But each of the characters are so distinct And the characters are played so well I mean we were talking about You know we were kind of at dinner last night Talking about who our favorite character was On the show And everyone has a different answer And everyone has a different reason And then there are characters that you hate But the fact that you hate them And the fact that you despise them Draws you in You're drawn into these characters I think that the the way that they kind of Portrayed and the way that the characters were acted By the by the actors And then the way that they all kind of weave together To tell this extraordinary story It was really um It was really compelling and it was like Just super impressive Uh directing, acting, writing everything There are handful of scenes in season one And season two which I would say are unbelievably psychologically Violent And there's just no other way to describe like How they just explode And in and in by the way they do it with Simple shots Very simple dialogue It's almost non-shelant in the way that they present these Truth bombs And you have to sit there and process it And you're just like oh my god It's just It's wave after wave It's an incredible incredibly well written show The character development is extraordinary Amazing production and set design by the way Also I mean when you when you Don't you want it You want to cool your face and you want to go to those locations Do you guys remember in season one Sacksville remember this because sacks watched it Season one the family is sitting at the table where they're watching the Hawaiian dance And Paula the guests of the family gets up and leave she can't take it anymore And then the next day they're in a discussion about it And the father says something about I think hierarchy or imperialism or something And it goes around the table and she just deadpan She says well maybe it's just time for others to eat Talking about you know like fixing these wrongs And I had to listen to it two or three times I'm like oh my god that is that is a line That just sticks in your brain There's a few of those in that show that I think are exciting And I was saying like they they really draw you in The set design the production design is so compelling You want to be there you want to be in that experience with those characters Uh, pineapple sweet Yeah, you're probably totally the pineapple sweet I mean and then in this season that whole hotel I looked up the hotel by the way online They hadn't you know they were on set design people come in and redo the hotel But it is an actual hotel. It's a real it's a real It's so magical. Yeah, I was such an incredible Oh freeberg we should make that the host of the wall in summit 2023 What a wonderful Sorry, I'm working on my Jennifer Coolidge Tell your director David Sacks what you like? Absolutely for you Yeah, my biggest loser was crypto and I think there'll be a subsequent domino to fall which is Now that Gary G And at the SEC has FTX and the FTT tokens as the grift He's going to go down the list of other tokens and He is going to start doing more prosecutions of griffs in crypto biggest loser for me All right biggest business surprise Let's see if we can get Sacks back engage in the conversation now that we're not talking about art and life Sacks Last year your biggest business surprise Sacks just produced a movie about Dolly. I know he is. I'm joking with him He's a true and he sold it to Mark Cuban congratulations on the sale Uh, David I guess me and Cuban are besties now fantastic in 2021 our selections for business biggest business surprises I was very surprised by Douse Chimoth by Moderna Sacks by tech moving to Miami and freeberg you were surprised by NFTs What were we surprised by in 2022 freeberg will start with you Elon Musk's acquisition of Twitter I think took everyone by surprise it kind of went I mean this is such an obvious one But it went from a whimsical fantasy and idea To suddenly you know cold-hearted reality with uh, you know a huge kind of negotiating saga That took place and court battles and all the drama that ensued and here's what I think was most surprising about it It wasn't just the acquisition and the and the fact that the acquisition closed But it was the the incredible Varacity of the head cutting cost cutting the demands that people return to work return to the office And then what was most surprising that followed that is the impact that that seems to have had on the rest of Silicon Valley Where now nearly every VC I speak with every CEO every board is looking to Elon's behavior for writer for wrong for you know Moral moral or not and saying that's a model for how you can challenge your team to achieve the impossible in an impossibly difficult environment Which is what we find ourselves in and so I think it was a series of surprising events He bought Twitter. He made these incredible changes and then everyone seems to be looking to that as a model And it's really resonated. It's created a rippling effect. I'm not saying it's good. I'm not saying it's bad I'm not saying it's moral right or wrong But the whole thing was really an incredible surprising unexpected saga this year Uh, so I give you on acquisition Twitter kind of the award. Chimoff. Do you have a biggest surprise? I would say it's uh Jerome Powell and the Fed and their staunch hawkishness on inflation I think everybody wants all of this to be over and I think we're definitely in the last few innings of it But I think what was surprising was how consistent and how hawkish and how bearish Jerome Powell was every chance he got He didn't capitulate or waver From the key message which he was saying from the beginning which is We have the tools to fix a broken economy But we don't have the tools to fix runaway inflation and so we will raise rates higher Than anyone expects and keep them there longer than anybody wants because on the back end of it We can fix a few broken bones But if left unchecked this could really do a lot of damage And I think that that was an enormous surprise that All the political pressure in the world all of the financial capital markets pressure in the world did nothing to change his position Sachs What was your biggest business surprise of 2022 david sacks of biggest Well, it was it was a pretty big surprise that Adobe bought figma for 20 billion That price tag in this environment pretty big surprise But I got to say I think freeberg nailed it Uh, gotta say that the business saga of the year was Elon buying twitter First liberal media was up in arms and he might do it then they insisted that he must complete the deal In any event he he did ultimately buy the company now he's affecting his changes I agree that's the big business story of this year Certainly was a big surprise for me that I got deposition for six hours Is it a surprise that you're sitting in twitter's headquarters today right now? Yeah, it is a surprise, but just by the way the rumors and speculation are getting out of hand I am not a candidate for a CEO of twitter So I want to put the kappa shun that because it's starting to get out of hand I'll the job is yours my friend congratulations. All right. I guess let me know you've earned it You've worked hard Take out the last man standing last man standing out with out last now that sacks has said he is not taking the job A bunch of lives have just stop taking Xanix the lives biggest fear was sacks was gonna get that job Whoo, we just canceled a bunch of Xanix Prescriptions congratulations to the lips sacks is not gonna be your overlord on twitter for me It's obvious the twitter acquisition is the biggest surprise by far and away Freeberg I couldn't summarize did better. I will say In six weeks what we have seen there is nothing short of extraordinary have there been bumps in the road Has it been a Little chaotic at times perhaps but the features that are coming fast and furious are gonna be the story going forward You've seen twitter for business sacks had his fingerprints all that you may fingerprints all over that You may have seen hash tags for stock tickers. I was a briefly involved in that. There are gonna be so many features coming And this is what Elon's zone of excellence is Product he is an engineer. He's a product genius the proof is in the pudding whether it's rocket ships or the cars We're gonna see a parade of features. I predict in another six To 18 weeks we will see people talking about all the great features in twitter not any of the transitional issues and people will be shocked my runner up Metastock collapsing That was my runner up for the biggest business Uh shock is that they just absolutely collapsed. I was just gonna add to what you're saying about new features launching while We've been sitting here on this pond. I'm checking my twitter feed There's a new feature where there's a view count on all of your Tweets and all of everybody else's tweets as well So you can see how many views a tweet is generating So this tweet that I posted yesterday has 1.5 million views. It's like incredible So it really shows the incredible reach of twitter And anybody who's thinking about going out like some knockoff like mass it on or something is gonna have to contend with the fact that it doesn't have Nearly the distribution So I think this really shows the power of twitter and then dav ruben Notice my I tweeted this just a second ago and dav ruben noted that the new york times Doesn't have anywhere near the views for its tweets because they bought all their followers Which is interesting. I didn't know that but I just went over to the new york times profile and my tweets are routinely getting 10 to 20 times more Reach more views than theirs. So this is a super interesting indicator of who actually people are paying attention to On twitter. It's fascinating This is fascinating. I'm looking at my own. I just did how do you give a 30 billion dollar fraud bail referring to spf And that was just less than an hour ago. No, it's 30 minute. Yeah an hour ago and I have 50,000 views already which is 10% of my follower count. So this is an extraordinary you see right next to likes retweets Boat tweets the feature train is coming and this will change the dialogue all these haters who are like twitter is gonna go down Who are rooting against Elon? Let me tell you something if a guy can land two rockets at a time and he can Literally restart the electric car movement and he becomes the number one car in any category He releases a car in how on earth would you bet against him to build software? You have to be idiotic This is way too much. I mean you guys like we should sorry Yeah, you're selling a forever for a company that you guys are working at like I mean come on I'm not working at the company. I get the sense of working at the company. Well you guys are advised There's right. I mean can you let me show another feature so I think it's cool next show. Let's go. Yeah keep on features Let's go pull up my profile real quick. Welcome to this week in Twitter. Oh my god Twitter now has affiliate badges you can see I've got a little craft ventures badge next to my name So if you you should be able to click on it actually To get to the craft ventures profile. Yeah so You're gonna be able to affiliate Users with business accounts and it creates kind of secondary badges after the blue check I think even the corporate journalists are gonna love this because if you're a newer timeswriter You'll have a little NYT badge next year name Wall Street Journal whatever you'll have that little badge So more and more people are gonna get blue checks and then people are gonna have secondary or even tertiary badges That are basically specific to their affiliations. Okay, so I think let's make sure we get let's get an all-in badge We are gonna have all-in badges really soon awesome. Okay, let's go for freeberg freeberg. Sorry That was our biggest business surprises and we just canceled your account freeberg It's locked out. We just took away you don't go through it anyway. It's all good to work out Okay best science breakthrough here's an easy one for us to do 2022 biggest science breakthrough What have you got salted of science we core of course have to start with you 22 biggest science breakthrough freeberg Yeah, I'm gonna give it obviously to the the demonstration of net energy gain from the national ignition facility in plasma fusion Uh that we talked about last week I wouldn't call it a breakthrough by the way I think we we we use that as a misnomer last week, but I'm still gonna put it in this category It's more of a milestone Along a very long path a very arduous path a very difficult work that's been taking decades So it's a great milestone But I think what was so important and impactful and powerful about it is that it's really catalyzed a change A sea change in the investing and the outlook that this is becoming more reality as I mentioned last week We've seen an increase of nearly 40% in the number of fusion startups and the amount of capital that's flowing in is now reaching 10 billion a year So this is becoming you know a real investable or an area that's getting real investment Some people might not think it's very investable, but that's why I think it's so it's been an important year for fusion And I think um, you know, it's something I highlighted last year. I was excited about and I to picked fusion Also, just point of clarity last week some people Chimath before you go to your prediction We're saying hey, you're talking your book on solar when you were in your disagreement with Friedberg That's obvious you've been very upfront that you were investing in solar you placed your bet Yeah, 100% Yeah, so just to just for clarity everybody knows he made that bet he's talked about it incessantly Plus those idiots that were saying that are stupid, but um, yes, let me uh, let me further clarify what I said last week and why it's important If Nick can you bring up the capital asset pricing model again? The most important thing for me is to make sure that we don't misallocate human capital into endeavors that I think are best left for research institutions funded by the government and I think when you look at a capital asset pricing model and try to build one out for Fusion as an example The expected rate of return That you need to get from this is just astronomically high Because of the beta of that investment risk and the market risk premium you have to generate And so you know from my perspective I think that there are probably four or five labs in the world that are capable of actually getting us To a positive energy equation. I think Friedberg I really thank you for actually saying that it wasn't a breakthrough and more of a milestone I think the real breakthrough is when we have Positive not just jewels, but we actually convert that into electrical energy Right, and we actually talk about power and watts and I think that most people listening probably don't even understand the difference between jewels and watts or don't even care and they want to Jump around here or there So the point is that there's an enormous path we need to take in physics And I think it's best done in governments and I don't want to see a bunch of billions of dollars get wasted To get to to get marginal cost of energy to zero right now. I think there is a point in time Where private startups can take the the last 20 or 30 percent But I think about this like the internet which is you needed DARPA to build v1 and then it could be handed over to Private industry and I think fusion when we look back Will look very similar and all the folks that try to build you know versions of the internet that were private I think found themselves lagging because there's just a level of investment that's required that's best served in government So anyways, that's let's clarify that for all the For folks who got their panties in a bunch of different but in an event my science breakthrough of the air is that there was a 13-year-old girl This was you know because of all of this fusion stuff actually We didn't even get to cover it because it happened in the same week And I think this is infinitely more impressive and is an actual breakthrough Which is a 13-year-old girl in the United Kingdom Who had it here to four uncurable form of leukemia T cell acute lymphoblastic leukemia so typically you start in chemotherapy if chemotherapy doesn't work you move to boomer transplants and It was uncurable and a lab in the UK basically using CRISPR edited these transplant T cells to go in and wipe out her cancer and now her cancer is literally undetectable Now if you bring up that capital asset pricing model again Nick what I'll tell you is The rate of return on a human life in my opinion is infinite and so Here is an unbelievable breakthrough that got very little attention because everybody was wrapped around the axle of fusion It happened in the same week. So maybe it's understandable. I didn't understand it But I think this is the single most important thing that happened in science not just this year But frankly in the last decade because if you can actually now do base editing And eradicate at least in this case a blood-based cancer and eventually will be able to bring that and use that towards solid-state tumor cancers It's a huge breakthrough in in just human longevity and human quality of life And that happened just a few weeks ago Okay, and of course for David Sacks his biggest science breakthrough is I don't care so moving on Sacks go ahead tell us yeah, no this category reminds me of We're going to bite in at that moment where he's like America can be defined in a single word and he's like a little That's kind of how I feel about this category America is a nation that can be defined in a single word I was gonna put him It's amazing how you figured out a way to be derogatory about Biden in the science section a new low even for you Sacks Oh, it's a good one sex. I like it. All right biggest flash in the pan 2021 this is what we said we're the biggest flash in the pan I said the woke socialist leadership of cities i.e. Chesa, Boudin Frebrax said the Constitution down Sacks said the word transitory very well played and Shemost said the metaverse also very well played Oh, no that Yes, very good everybody get your flowers Enjoy all of those seem like pretty good selections, but this year is what everybody wants to hear about Freiburg tell us now who is your 2022 biggest flash in the pan the undisputable who we got biggest flash in the pan of 2022 was the all-in summit Oh It can't matter it went That'll always be a strong and then significant memory. It was such a hot thing for a minute and then it died So um to the all-in summit I I raised my glass. I pour one out. I toast to you to Miami and Unless David Sacks carries it from here. It was a flash in the pan. It was a flash in the pen A Sacks who's your flash which Democrat is a flash in the plan for you? So this is where I had Liz truss as you guys mentioned she only survived 44 days as PM I mean that's only four scare amoo cheese Which is basically fired by the bond markets after she combined a Thaturas tax cut with massive energy subsidies to counter the price spikes caused by the war in Ukraine That's just from actually committed to this was deemed untenable by the UK Central Bank at crash the pound And I think there is a serious point here, which is that as much as thatcher and Reagan were the two towering heroic figures of the 1980s I think zombie thatcherism is not going to be electrally viable In the UK just like zombie Reaganism is not going to be viable in the United States I think that the conservative movement has to stop living in the past We have to develop fresh ideas to meet the economic and foreign policy challenges of today Chimoff do you have a flash in the pen? I actually think fusion literally was a flash in the pen It was it lasted 10 to the negative 10 seconds So that more less of a flash you can't have without being a flash in the pen. Oh they haven't hey Sacks I see something here. Oh look who is Oh is it the proprietor the proprietor the owner to our customer support at your service So actually spent the last 15 minutes selling your new features on the podcast pretty exciting Well the like the views are like incredible. Yeah, I mean and I saw Dave Rubin already made an observation That if you look at New York Times their views are maybe one-tenth like my views just me as a lone tweeter And he said that their followers are inflated by just basically buying a bunch of follower counts Yeah, the the views thing is huge. That's why I push the views which is like actually a lot harder feature to implement than you think because this year a number of transactions per second like It's I think it sort of requires System-wide on the order of of three million transactions a second to actually calculate the view To you know calculate and display the view count if I put Twitter global so it's like three million per second It's a lot for those of you listening Elon Musk has joined the pod you lawn how's how's the first six weeks been generally speaking of owning Twitter? Well, it's been quite a roller coaster which obviously you've But witnessed and been on the roller coaster as well. Yes the drama mean I've taken the drama mean. It's it's quite up Yeah, I mean it's exciting But I think it sort of Has it's highs and lows to say the least But overall as seems to be going in a good direction and you know, we've got the The expenses reasonably under control so the company's not like On the in the fast lane of bankruptcy anymore And we're releasing features faster than Twitter's history at the same time as having contained the costs and and Reduced the cost structure by a factor of three maybe maybe four so You know the verified is obviously that that's that's that's huge. It's revenue stream as well as A means of Identifying you know of like knowing that it's a real person and not a border or trial situation The Having the affiliation organization affiliation which I especially talked about that was an idea of David's that was great To you know have organization affiliation so you can know that somebody is An actual professor at Stanford or and that this particular handle is actually Disney not someone simply putting I work at Disney in my inner bio So I think that's gonna be really helpful it just really just having um detailed and nuanced verification So of all the various things that you say you are are these things validated by other people in organizations Can you tell us how you do product iteration Elon because one of the things that I think some people Got jolted by over the last couple of weeks is like a bunch of things got taken away or changed or ruled changed or Policies change and there was very quick action And then people had all this negative feedback about the the quick action without communication But your extraordinary talent is to iterate product to success. Can you just maybe share with people how you Do product iteration in this context to help them understand how some of these decisions get made and Why moving quickly? It's so important and just you know how you're doing this I'm a big believer in like you want to look at the net output so it's sort of like You know, what's the bad thing average? Uh, if you're it's like baseball The point is is not that you like uh, you know Hit the ball, but it's like well, how many home runs you get and how like what what's your actual you're slugging percentage Yeah, slugging percentage. Yeah. Yeah, it's like you've got to swing for the fences. You're gonna you're gonna you know strike out a bit more, but we're gonna swing for the fences here at Twitter and we're gonna do it quickly so And I think generally like my error rate and sort of being the chief twit will be less over time um But you know in the beginning we'll we'll make obviously sort of a lot more mistakes uh And you know Because it's I'm new to the I'm like hey, I just got here man um, so I mean if you look at like the actual amount of improvement that's happened at Twitter in terms of Like so like having costs that are not insane uh and getting and actually shoving product that on balance is good I think that is uh That that's great like I think we're actually executing well and getting things done. I think we'll have fewer um Fewer gaps in the future. How did you get to your intuition on what the efficient frontier of employees Needed to be to make the product better well Um Yeah I was a part of this where you basically asked the question who here is critical and who here is exceptional Yes, I mean is so I mean it really the What the criteria is trying to apply and obviously you're gonna be perfect Um if you're moving fast and and there's a lot of You know people you're talking about here is that anyone who is exceptional at what they do where the role is critical And they have positive effect on others And they are trusted meaning they've put the company's interest before their own Should stay pretty straight forward. Yeah And I know you know also is up for working you know working hard like Uh That would not that would not just this is that's not was not Twitter's prior culture Yeah, were you surprised that that the intersection of that circle and the people that left was basically 25% Were you surprised it was that deep or did you think your intuition was like it's probably somewhere in here Well, I think you could just stand back and say Without knowing how many employees twitter has at all and say How many people are really needed to run twitter Like they say you don't know what the employee head count number is at all How many people are needed to keep the site operational like let's say if excluding product Product evolution you basically have to keep the servers going and uh You have to have customer sort of a support function to take down Uh material that is in violation of the law. How many people What's the minimum number of people? That's in the hundreds probably it's not exactly. It's just not it's not like a giant number Yeah, twitter sounds like 2000 people right? Yeah, we're still 2000 people. It's not nothing and actually if you this There's actually on the order of uh Like almost 5,000 contractors Like still almost yeah almost all of the What's called trust and safety work which is like um The support functions for the site are done by contractors You're doing a lot more it take down hate speech than the company previously was dealing yeah absolutely Like hate speech impressions are down by a third and we'll get even Um lower maybe you could speak a little bit to the what we discovered uh I think in those early weeks which was The incentive the incentive previously was to create as many accounts as possible Uh, and there were a lot of quick fixes to lowering all these you know What people might call bot accounts in some cases it was people opening many millions of accounts But uh, we discovered this very early how easy was it for you uh with the tech team to maybe lower the bot count And all the fake accounts maybe it's being a little bit to that because people have seemed to think that Gosh, it's a really hard thing to get rid of bots and it turns out it isn't um We still have a fair number of bots in the system um but The like I think the You know it's infrastructure the way twitter set up previously was this relentless focus on what they called mdow Which is monetizable daily active users although I would say the monetizable pot is dubious But at least things that appeared to be monetized or could be passed off as monetizable daily active users So this I created an incentive to turn a blind eye to a fake accounts So if the incentive structure is like You know Maximize the appearance of monetizable daily active users then you're just it's a strong incentive to Pretend that a bot is real and that's what happened So um We're taking a lot of steps to reduce the bot the bots and troll situation um So many um And um I think you're seeing that in the usage like it's not like relatively rare to have your replies filled with Crypto scams. I'm not seeing any anymore freeberg you had a question Yeah, I mean just on your earlier question, you know Elon when you first started Making changes at Twitter after you bought the business A lot of people kind of took notice at how extraordinarily swift and significant those changes were Yeah, and um there's a lot of technology companies That have CEOs and investors and boards and we all talk to a lot of them And they're all now having a conversation like look at what Elon did at Twitter How can we do something as aggressive as swift as deep Do you think much about kind of the model you're playing for other businesses and other business leaders particularly in Silicon Valley and how you're operating Twitter do you ever kind of talk about that because I know you you mostly talk about your business and you talk about the businesses you're running But you're having a big influence. I think and how other people kind of act and behave that are other business leaders and run other technology companies I mean to frank. I'm not I'm not really You know I'm thinking about that much because I'm just thinking about like how do we um I just like you know Uh just get Twitter to be in a financially healthy place um and and and fix the engine of engineering so we can have a rapid evolution of of new products so And you know, I mean I guess I'm in sort of in some ways an important position where I Uh don't don't have to answer it's it's not public and we don't have a board really so I mean, so I can just go You know and then I can take actions that are drastic And obviously if if if I make a bunch of mistakes then the then Twitter won't succeed and that'll be pretty embarrassing and sad But as long as like I said as long as the badning average is is good um that that that that the um wins Uh, you know, it's definitely outweigh the mistakes then um, you know, it'll be a great future And I think I'm very optimistic about where things headed. I think a lot of people want to talk about You or understand Elon your position on freedom of speech and your principles. I'm curious. You've been pretty upfront about it How do you think about it post acquisition? You know what speech should be allowed in the platform Kanye came back He just went insane Is account got revoked what what if you learned I guess now that you own it because you must be getting a lot of inbound from people asking you Hey, how are decisions going to be made etc You've been clear transparency is super important in this but yeah, what are your thoughts on free speech and speech on a platform like this Well, I mean the general principle I think is that we should you close the law In any given country so the law is very quite a lot by by country um, and um so I think we should be The doing free speech that that's close close to the law and uh That's that's that's the general principle um The I think there there are other things where it's like okay, we we um Like for example like if if you're an advertiser um You don't want an extra you don't you don't want your ad like let's say it's a family movie next to some You know NSFW Content even if that content is text You know, it's like um That they'll be like uh, that's probably that's we don't you know so So that that's okay. So they'll that's You know part of what you know like when like so there's there's more of an allowance for Which if I it's what somebody call hate speech on the system, but it's just it's not gonna be promoted It's not like it's we're not gonna be recommending hate speech It's a risk of stating the obvious And we're not gonna monetize hate speech so Or negative speech like that's No, nor would advertisers want us to you know any any I think it's gonna be a rare product that wants to be Next to seriously negative stuff. I was just saying you referred to it as hey freedom of speech But not reach because this is a very nuanced discussion like should this stuff be able to hit the trends You know in that kind of so like it's it's only possible it's some things that will be regarded as hate speech We'll hit we'll hit trends, but I think it's gonna be relatively unusual Uh, especially as we are doing a better job of controlling the the bots in troll situation and and You know do one exercise like there's a difference between the bots and trolls like bots So like fully automated accounts, but like a troll foam would be where you've got like you know 100 people in a warehouse somewhere each with a hundred phones And so they're actually humans and they're gonna pass a capture test or you know and they can You know reply reply and they're because they're actually good humans, but it's actually 10,000 And Accounts that are just that they're obviously not operating as as real people So that that's you know stuff like that can cause things to to to trend negatively. That's why I'm like a big purported of having just a low cost um verification capability And um, yeah, so But like this is definitely a work in progress. So there's um Like I said, it's gonna be and I did prefer like one of the first things I said after the acquisition close was like we're gonna make launch mistakes, but then we'll try to recover from them quickly and that's That's what we're John and I think we've generally succeeded in recovering it from them quickly and It's been going pretty well Was the paul Graham and journalist suspensions mistakes from have you talked about this publicly about how that all kind of got resolved at the end? Yeah, I mean the program Suspension was definitely a mistake and actually called program to apologize personally for that one Yeah, great. Yeah, um, so You know on the journalist front the I think the journalist's suspension is where we're not not a mistake in that um for some reason a bunch of journalists thought they were um Better than regular than everyone else and that if they engage in doxing and and uh, you know Other and break the rules in various ways that that they're not subject to suspension even though You know average your average citizen is and I think that's just messed up The same rules should apply to people to call themselves journalists as to You know anyone else on the system They shouldn't be uh sort of above the rules for some reason they thought they they should be that's that's that doesn't make sense I don't think that's right. Yeah, and the rules being transparent and upfront I think that's what everybody's looking forward to maybe some just complete clarity and transparency and you've said from the beginning When somebody gets suspended or the shadow banning or the sort of we tips into this really weird stuff that we discovered during or you discovered Where the journalists discovered during the Twitter files. It's it's kind of a bummer that people are being sanctioned or shadow banned And they don't know it if we're gonna have a system the rules should be clear to everybody. Yeah, absolutely So the the something I've committed to and we'll Uh, well, I think probably be able to roll that out in January um Just by the way there is like a bit of a great you know, we are not going to be rolling out a ton of new features over You know Christmas or New Year's and stuff so There's like a you know Was the next sort of Feature set will probably roll out mid-Slate January Um, and hopefully in that we'll we can include um information about why an account is suspended or uh has uh what Is uh called within Tesla to Twitter visibility filtering Uh, aka shadow banning so um And some of these things like like are like there's a lot of things that just happen accidentally where You know there's um You know the rules in the system that are meant to detect Whether someone's a sort of bot or troll or or like Brigading where they're like do you know and and then and an account is sort of innocently caught up uh in that So um like there was some accounts just suspended uh yesterday because um I would temporarily suspended lay out they got like 12 hour suspensions because Someone in customers is someone in trust and safety thought that they had Posted uh a nude photo of hunter Biden something But they hadn't they hadn't actually done that um I don't know it was just basically mistake There were some counts that were they would go to 12 hour suspension yesterday for uh It in error And then they weren't they weren't sure why it why it happened it was just essentially a mistake uh in the With twitter customer support that was corrected Elon. Let me uh let me ask you just a slightly broader question one of the things we just talked about was The regime change that's happened where You know we all have to act differently now that the risk free rate is probably gonna get to 5% and I'm just curious Across all your businesses so twitter yes, but really more importantly Tesla SpaceX Are there decisions that you will make differently or not at all or will make that you wouldn't have made otherwise In this new regime and how often do you think about that kind of stuff? Well, I think like it's more like like it does seem like we're headed into a recession here um in 2023 The magnitude that recession is debatable, but I think it's at least a uh A like to moderate recession potentially. It's on the order of uh 2009 um So that's that's so I think it's it's it's wise to kind of like Prepare for the worst hope for the best prepare for the worst Don't get too adventurous like like watch out for margin debt Like I would really advise people to not have a margin debt Uh in a volatile stock market and uh you know From a cash standpoint keep keep powder dry You can get some pretty extreme things happening in a down market um like Brett Johnson who was a CFO who is a so is if you see a Focus of SpaceX was at Broadcom in 2000 and he he said that uh and that's a good company making good products And he said the the from from peak to trough I think in less than 12 months uh broadcom went down 97 percent So like even if you had a small margin loan there you got you got crushed Um it subsequently recovered and I think you know To much higher levels, but You know if there's like mass panic in the stock market uh then you've got to be really be careful about margin debt so But I mean the this is just as we know this the economy is cyclic so You know you and it's booked somewhat overdue for a recession And my best guess is that you know we have So stormy times for a year to a year and a half and then things start to Don't breaks roughly in Q224 would if if I would get it. That's like my best guess Recessions don't like like booms don't last forever forever, but neither do recessions And it's a 14 year boom. So a six quarter recession seems like yeah that made actually balanced out the last time It was what four or five quarters. So It's not easy. Hey um the Twitter files Or how how how much longer are these gonna go on? Uh it seems like every week another drop uh and these Are pretty controversial um how much longer are the Twitter files gonna go on Uh in your mind Yeah, and maybe why is this important to you to to make sure that people understand the stuff Yeah, I think it's important to like you know if we're gonna be trusted in the future to kind of clear The decks before stuff that's happened in the past So um i mean to be totally frank um Almost every conspiracy theory that people had about Twitter turned out to be true So Is there a conspiracy theory about Twitter that didn't turn out to be true? Uh he's so far they've also not to be true and if not uh More true than people thought is there a part of the files that really shocked you more than the rest of them I got the things that have been disclosed Of all of these things is there something that really sticks out with you as like holy shit. I had no idea. This was happening Or is the whole thing just a big dumpster fire? They were just looking at one huge thing um You know like siops versus the hunter Biden thing versus the yeah Yeah, the number of FBI people involved that was pretty tough is pretty intense. Yeah The FBI siop stuff to me was probably the one that was the most insidious like the rest of it I could think of like you know a bunch of overzealous lips got used yeah got it You know what I mean sure sure but to have like a secure skiff that essentially sends things that you know government agents want the populist to basically think It seems like out of like a really bad dystopian novel and then it turns out it existed And then it also the thing is it couldn't have just existed at Twitter So what do you do about all the other places where this shit's happened you to Facebook? Yeah It's like it's not a team that's surprising to me. I mean, I don't know Maybe I just believed all the conspiracy theories But I've also been inside some of these companies and seeing how they operate So honestly none of it was a surprise to me Was it a big shock to you? You weren't wait wait you Freeber you were I think you can claim that you weren't surprised that these companies were shadow banning although they denied it But did you really suspect that the FBI was playing a role in flagging content For these companies to take down like that blew me away. Wait can content that's got nothing to do with like terrorism Yeah, they're not investigating crimes like there's no crime Right. Yeah, they're literally flagged satire Maybe they didn't get the joke I don't know but Yeah, they don't seem to be a humor driven group but Um, they don't seem to have the best senses of humor But aren't they supposed to get Warrants isn't that how it's supposed to work in a democracy? They want information. They're not even famous of their phones Yeah, they're all friends. That's the thing that's troubling to me put put yourself on either side of the extremes Hey, we have Michael Schellenberger here who broke the FBI story in the Twitter files. So let's look at him and deceit We can explain because I think maybe the audience isn't caught up on like what was discovered so You know, I know I have to follow Elon Musk. I didn't seem fair. Yeah. Hey guys Hey guys. Oh, hey Michael. How are you? I'm good. I just a quick question for you Michael But first of all first of all who makes that sweater Oh, I'll send you mine man. Do you want it or are you making fun of it? I'm asking you the master of High praise from you brother high praise I'm asking uh just briefly Michael um isn't the FBI supposed to get warrants uh to Yes, take actions with folks and then I guess is that at the crux of this? Are they doing this at other companies you think or they just like embedded in YouTube? Yeah, so we expect they're embedded at meta and that they don't get warrants and they're kind of tipping the scales and And is that a good thing for society or a bad thing for society? It's a bit of a basic question Yeah, well, I think there's a couple there's multiple issues relating to FBI that I think have to be unpacked a bit But the first one is that yeah, FBI was constantly pushing the boundaries of what is legally and ethically acceptable in terms of requesting information Now, I think what you saw over the last uh three weeks was Uh a shift and I think our own understanding that we did see more pushback from Twitter executives against FBI And some alarm bells being uh wrong in terms of the requests that were being made from the intelligence community Uh, but that these guys were really persistent they kept asking for more they kept getting more and more cooperation It's very troubling. It does look like Congress is going to look into this uh the two heads of the committees That are tasked with this or have said that they're going to look into it next year I think the other thing though that we saw that I think is is more troubling was this persistent uh effort to Basically communicate to Twitter executives, but also to news media National security correspondence that there was this heavy foreign infiltration going on this this Russian disinformation And it appeared to me looking at all the evidence both that we saw from within Twitter and from outside of it that this was pretty organized effort to convince uh key executives at Twitter and Facebook, but also these key reporters That they should expect a hack and leak operation Sometime right before the elections having to do with Hunter Biden. I find that very suspicious Can I make an observation? I think that maybe what we're finding out Is that the mainstream media tried to go back to its 1980 Cold War playbook and turn Russian to a boogeyman But as we're seeing in the Ukraine war You know, they're not nearly the formidable foe that we thought they were And so it could probably be the case that in 2016 They were as inept technically as as they are militarily right now And so we may have just built up this monster That uh is kind of more like you know A much smaller thing to be worried about and we all ran with it because we had no evidence But the Ukraine Russia war is evidence that you know this highly sophisticated war machine and propaganda machine It's not that good at their job Right Yeah, I mean, I think that what's there's a lot of interest that we're being served by hyping the so-called Russian misinformation threat I mean one of them was just to simply explain away the Trump phenomenon as a consequence of foreign interference Certainly the people that ran Hillary Clinton's campaign had an interesting doing that But then you saw it become a sort of way I think to condition people for the release of the Biden laptop And again, we can't I can't prove that but it is striking that the Yol roth this means Twitter executive who I think was the object of this misinformation campaign Um testified under oath that he was being bombarded with these messages all throughout 2020 that they should expect some sort of a hack and leak operation So that when the New York Post finally did report on that computer uh in 2014 It was briefly censored by Twitter, but I think more importantly it was discredited in the minds of many voters including myself I really didn't think that that laptop was what they said it was and it turned out that it was So I do think it's there's a real troubling pattern of behavior by both the FBI agents But also by the former FBI executives including the deputy chief of staff and the chief counsel from FBI that that were at Twitter as executives at the time And in fairness Michael, uh, this has been brought up many times But I just would like your take on it because you're a lifelong Democrat correct until until last year great So it would you know, uh, just less anybody think that you are like some mag a supporter here Just lose my sweater This was all in the backdrop of Trump Asking for the Russians, you know during that debate to hack Hillary for him interfering with Solansky and trying to get him to give dirt on Biden And the fact that Hunter Biden was obviously dirty Uh, so to expect a hack There was massive precedent for it. So that's set the stage for this correct for sure and there is definitely Uh that going on and and maybe that's all there was to it It is just striking of course because and I didn't even mention in my this was by the way This is Twitter thread part seven that I did on this issue Um, I didn't even get into the fact that you know within a few days the many Uh, former senior heads of intelligence organizations and others Came out and said that it was the result of a Russian disinformation campaign So yeah, sure. I mean, I guess we could find some other explanation For it Whether it was innocent or coordinated, but it is it is striking also. I think the other thing that we found Was the contrast between the the threat inflation and what what Twitter was finding themselves I mean, there was you know, you'll repeatedly you'll Roth would would respond to FBI that Yeah, we looked into these accounts that you mentioned and they were all very low follower accounts with very little activity So they just weren't finding very much foreign Influence on the Twitter platform and so I just think it was grossly inflated either for kind of Good reasons or bad reasons. I should say yeah And it's uh, there there's no perfect way to police this stuff obviously and uh, okay Well, listen, we appreciate your reporting. Yeah, thanks for doing it And if you haven't read Michael's book uh, San Francisco You did some great reporting there as well and uh continue its success in your investigative journalism Thank you, Michael. Thanks guys. I appreciate it All right, cool. Sorry. Oh, lost him Sorry, what are you gonna ask he's still here? Oh, okay Hey, you did an interview on that I think I saw it on YouTube or something where you interviewed someone who was homeless in San Francisco And they were addicted to drugs and they kind of said some narrative about how they were In this condition because San Francisco basically pays them to be homeless and pays them to do drugs on the street Did that ever get published and did that come out because it was such a compelling couple of minutes that you got on tape there It really for me sent home a message of how far Kind of progressive Policies can take a society and it's such a beacon for where things might go as other people start to think about adopting Similar policies around the world, which is why I thought it was such important reporting Whatever happened with that and working folks see that because it was such a moving interview for me Yeah, if you just google michael shellenberger youtube homeless to be able to find all my videos There's a lot of them that we did with people on the street all of them Of course people asking and wanting to do them But yeah, I mean what we I also wrote about that in my book Which is basically a San Francisco pays cash welfare payment of somewhere between six to seven hundred dollars Plus you can get two dollars in food stamps and a lot of People sadly use that to maintain their addiction and this gentleman Uh James with the tattoos on his face was very honest about How he was playing the system in fact he was himself We found this increasingly kind of horrified by the incentives that San Francisco was creating for people to live on the streets and And live on the streets in their in their addictions. So yeah, you can find that on youtube So many people say incentives drive behavior and unfortunately the these policies all came from a good place from a kind heart And the idea that we could help people in need and unfortunately the way that the incentives get structured They can actually cause more harm than good It's such an important lesson I just wanted to say that because I think you're reporting on this really hit that home Uh, so so thanks for doing that. I think it's really important because we have we have to do the right thing for people But we also have to be careful that the policies are done in the right way. So thank you So well said freedberg because when you're michael and I just think you're very courageous for doing it because It's very easy for somebody to say oh, well you are being callous the truth is incentives matter And we saw we've seen this over and over again if you pay for something you get more of it And really San Francisco is bearing the burden. I think this is what you're book and You know and a lot of the videos you've made at least the message I got was San Francisco has the lowest price of drugs the lowest enforcement and the most incentives therefore They suffer because every person who is you know addicted comes here Because they speak to each other and 90% of the people who are in San Francisco are here because We have created an incentive structure. Is that directly correct as we wrap here? Yeah, 100% correct Including just the non-enforcement of laws against sleeping on the sidewalk doing drugs in public Now I require me ultimately three times more people die Living outside as an unsheltered homeless person rather than live than being in a shelter and for me That's all you need to know to know that you usually we cannot allow our brothers and sisters to sleep on the street No matter how desperate they sound about wanting to avoid going inside It's three times deadlier to be on the street then inside So the compassionate thing is to force people into housing. Yes That's a very tough for people to say But you know because you're we have this perception that people have freedom They should have the right to do this but a person who's taking a fentanyl in your research Is not thinking correctly and if it was any family member of ours We would not want them to make that decision for themselves. We'd want somebody else to make that decision for them correct Abs I would want that from if I was on the street so desperate that I was you know smoking fentanyl and breaking multiple laws every day Of course, I would want to be hospitalized You know and usually and draw you know people overcome their addiction That's the good news we always leave out of it But it is possible people do overcome their addiction all the time But they often need some some an intervention from family and friends And if that's too late for that then you need the intervention from the from the city all right Michael thank you Michael. Appreciate it. So as we get back to the all-in news network We've now gone 24 hours a day the all-in news network has launched We'll just have a road to sit at various offices throughout Silicon Valley letting executives and CEOs just drop it Imagine we did like a 12-hour marathon show For charity. We're just people showed up and we did a what what what do they call those on TV? What is the charity? Tell us about you cala plane You know by jcal. Yeah, no, no just a t. Yeah, tell us jcal has to stop fly commercial. We'll do a telephone Hey, sacks. Thank you for setting up those amazing drop-ins well done. Yeah, thanks sacks. Thanks sacks And so that's your jacket. That's a great jacket. Is that custom? That is an isai a all-store isai This is the Christmas or holiday jacket. Who's it by isai? It's Valentino. All right. Well, that's that's that's nice also Okay, that's nice. I say I but okay, let's keep going here. We got to go to lightning round all right Let's move biggest flash in the pan. We were was our last I went with crypto pretty easy to say that. I'm not gonna get myself a big high five You guys think of the Elon conversation real quick. Well, he's very talkative and he's anything interesting or surprising for you I mean he said the biggest you know thing that people want to make sure to avoid his margin debt I know that was interesting. He's working hard And um, he's just such a product a focused guy. He just gets his he's like so deeply into it. It's like yeah Just do the thing you got to win right freedberg. I mean if anything's oh my god. Of course. It's product. That's it. That's it So I mean and you know Products are made by teams. So what I think is distinctly different here. I'm just giving my personal opinion I don't know what Microsoft teams. No, no, no Teams make products and so what I just want to say here is you know like the signature stuff for teams suck No, that I'm not you know don't trigger the bundle But I just want to say you know like yeah, this is a takeover As opposed to building a company from scratch. He's had to assemble a team and then work at this incredible product pace And I think those two things are starting to click week. Yeah, for sure He's gonna look very different than week the first six weeks Yeah, the products are really looking awesome and it was nice to him to give me that shout out on the you know The affiliate badges, but I'll just give a shout out to I didn't hear it. What was it? Oh, well, he gave me he gave me some credit for the affiliate badges But I wanted to give credit to the PMs who approached me about that idea. I win again Okay, sure it is there. Let me give let me give let me give credit to the actual PMs Evan Jones and Patrick Traeger who they Approach me about this idea they had and then I helped You know give it some momentum Here's the truth when Dave and I spent the first couple weeks there now that it's a little more public He wants to be on the program what we found over and over again was that there were great features that were ready to be released That were being held back by management And there were brilliant people with all the ideas that you think should have been released And they just weren't allowed to release a lot of these products Why? Who knows but now that ease and charge I think you'll see the product cycle is gonna go much quicker the most important thing I saw which is such an important lesson for anyone running a business in Silicon Valley is that the pace of decision making It matters far more than the accuracy of decision making. It's always been like one of my three big models Say more about that for entrepreneurs. Yeah for me like my number one like my three things are always like grit biased action And then narrative but like biased action the rate at which you can make decisions Is a far greater predictor of success than the accuracy of the decisions you do make and so you have to be willing to embrace failure You have to be willing to make decisions that could result in something not being done correctly or making a mistake And even getting embarrassed on the internet You know by making mistakes and having to call people like Paul Graham and apologize for them and that was a big moment But that was interesting as a business as a business scales As professional managers are brought in their incentive is to not make mistakes Their incentive is to do things that are predictably going to work and are predictably not gonna fail And therefore they avoid taking the risks and they reduce the rate of action the rate of decision making And that's why so many businesses ultimately don't scale pass some sort of inflection point or when founders that are willing to push that envelope step out Everything starts to fall apart And it's so critically important. I think to look at that as being I think Elon's defining trait and characteristics Regardless of the scale of the organization in the enterprise He's still willing to act with that level of biased action that you typically see in a small startup. Okay And put his reputation on the at risk. Yeah Just some of that by um, I sat in a meeting yesterday. He said that If we're not rolling back 10% of the time we haven't pushed hard enough. Right wonderful So I mean it's like if you're never rolling anything back because you never make a mistake Maybe you're just not right moving fast enough. You don't have enough enough enough enough You're not fast enough of a bias towards action. You're too afraid of making a mistake By the way here's what's so interesting about the views feature is that A bunch of websites. I think it started because Instagram did a bunch of apps deprecated, you know likes because they felt that it was too It was part of this negative cycle and so they they took all the stuff away and basically views is Going sort of back in that direction and giving more granularity in terms of outside in social engagement on a post Which is I think interesting to see it's happening in a moment where all these other sites An apps are actually going in the opposite direction Well, it's it's like a standard feature on YouTube and it's very powerful for YouTube's network effects because it shows you how many views you get so It discourages people from using other sites because you know you get the most distribution on YouTube So it's weird that other social networks don't want to follow suit. I mean in one hour they had it But they deprecated that's what's so interesting But I guess you know my point is we've only had this feature for an hour And I didn't realize how much distribution my tweets were getting and it definitely undermines my incentive to want to go use Some other platform when I see the distribution. I'm getting on Twitter Well, if you're getting 10 times more distribution than the New York Times You know what's going to happen is people stop listening and reading the game Well, I mean it's sort of like this podcast itself like I mean we people ask us to go And my point is we have to rely on social proof and anecdotes about The actual scale and the breadth and the reach because it's impossible for us to get one holistic view That shows across all of these different modalities whether it's Spotify or Apple podcasts or YouTube how many people Listen or watch and you know we added all up and you know we think it's in this You know sort of three to five million range of people But if you just had a numerical canonical number that was irrefutable you just run over everybody This turns it into a meritocracy. This is gonna be terrifying to some blue check marks when they see That the people who they report on get 10 times as many views as they do of course is why when when people Journalists on hand it or other look at Sean Hannity go to Sean Hannity's profile And for the number of followers he has How pathetically engaged his audience is it's all bots. It's all trolls. It's all nobody's I looked at Mitt Romney just put out a video whatever in the first like half hour He had a hundred thousand views like every politician who starts seeing this is gonna go wait a second I mean the world I'm getting more views here than I am on MSNBC or Fox the world is I need to do this Rational place if Mitt Romney actually has more influence than Sean Hannity Let's hope okay. Let's move on we got to get through this quickly. It's our longest episode ever Here we go We are gonna do next up It's very this is a very important category best CEO of 2022 in 2021. I went with Frank Slootman and Elon Musk Uh, Shamaath went with Satya and Nadella Sax went with Brian Armstrong and Freeberg went with Jack Dorsey now we go on to 2020 To sax who? Everybody wants to know sax is best CEO of 2022 go ahead sax Uh every founder took my advice to get leaner so down their burn Create runway, you know whether the storm down, you know So you're giving a generic answer not a person. Yeah exactly. I mean look I think actually a lot of the names a lot of the names Well, here's the problem is that you know Yeah, can I finish Jacob The the names that you mentioned from last year would be the top candidates for this year I mean, I think Slootman and Adela had a good year obviously what Elon's doing We just talked about it's amazing um Brian Armstrong. I think stock hasn't done great But he's been a strong CEO, but I don't want to repeat the same names. I think that You know every CEO who responded to the regime change by Cutting costs getting leaner extending runway I think it deserves to be on this list and unfortunately a lot of them are just resisting and they're just not Yet taking the medicine or they've been taking the medicine and little drips and drabs instead of just like swallowing at hole and getting a move on Yeah, just Drink the whole two table spoons of medicine. Don't sip it. You got to just take it. It's not getting better I mean the stock market today should be a wake up call. I mean that this is one of the worst days in the market the whole year So things are getting worse before they're getting better Chimoff who is your best CEO there? Well the numerical answer is Vicki Halib who's the CEO of Occidental petroleum Stocks up like 140% this year. It's technically the best performing stock of the year 63 billion dollar company But that's just a numerical answer who I I Actually want to double down on David's answer X axis answer because I agree with that I have been guiding our portfolio company CEOs To be at cashflow break even now or extend runway to q1 2025 And they're 25 yes because I I mean I think you're 24 while you line and I are kind of roughly in the same place We have been for a while, which is like you know mid 24 is when the recession ends and you need to give yourself Two to three quarters of buffers so that you can go and raise around which takes a quarter to two quarters and once you start to get kind of get escaped velocity out of a recession Having money through end of q1 2025. I think is a is a minimum requirement and you know of the companies that I think were the most precariously Position there was five of them that got their acts together and really did it But these are all CEOs of companies that you know, I mean if you said them you would know some of them But I do agree with David. I think the CEO that bit the bullet so maybe publicly what I would say is You know the CEO of carna deserves a huge You know metal for having the courage to do it before anybody else did the CEO of check out calm just took a huge right down These CEOs are making sure their companies survive Freedberg best CEO 2022 my vote for best CEO Is a Warren Buffett and I think it is just simple arithmetic He has for years and now for decades proven himself To be just not just an exceptional investor stock picker whatever the kind of typical Quip is about what he does for a living But I think what's so extraordinary about Buffett is that regardless of the market conditions Um, he can kind of remain steadfast in his Intent and in his mission and he doesn't kind of waiver Uh, and you know, he doesn't take an active role in ranting and complaining about markets and politics And I think that that's what makes him such an extraordinary leader He stays within his zone of competence. He doesn't do things that he doesn't know about He doesn't let the macro drive him and cause him to be kind of um, you know affected by it and he says this is what I know how to do This is what I can do and that is all that he does do and he does it so exceptionally well And to Chimoff's point he is the largest shareholder of Occidental petroleum Along with many other Incredible businesses and I think he's proven in a market like we just had this year Why he is kind of the most extraordinary CEO or one of the most extraordinary CEOs But one of the you know best kind of Capital allocators of all time. I'm going to go in a similar fashion Uh, as Chimoff and Saks and go with the money losing CEOs Who have dedicated themselves to free cash flow Uh, and to getting to profitability from the last cycle arabian b an uber were the money losers and now air bnb is my number one They become a money printer. They are now making bank And they're still growing very uh, quickly and then uber I put it in my second They need to do another riff. They need to cut some expenses, but they too are hitting the free cash flow and the network effects So I'm giving it to Chesky and then Dora One and two okay, let's keep moving best investor for me Uh, I'm going with the investors like a general category Poor demanding governance and doing diligence again Uh, or who never stopped let me say it that way there there's a generation of investors Uh, who've raised their funds in the last five years and didn't do diligence didn't demand board seats didn't demand boards Those uh idiots are now paying the price and they created a lot of this mess of entitlement and a lack of governance I want to give a shout out to the bill girlies of the world Who fought for governance and fought for diligence in the face of being told okay boomer. You don't get it Who do you have uh, best investors? Chimoff polyhopatia. I will pick the what are called the pot shops. So these are Folks that have strategies where they have hundreds of investing pods underneath the umbrella and they have this very sophisticated risk infrastructure. So this is what Ken Griffin owns in citadel. This is what is the igneous under owns in millennium Revan Howard is another one De Shaws another one so they have all kinds of strategies But that are essentially run by computers that allocate risk you know Scale you up scale you back turn you on turn you off fire you overnight and those strategies as a whole ran over the market this year They were the best performers They are giving back billions of dollars. They've generated double digit positive returns They're raising their fees in some cases some of these folks are moving their annual fee up to 4% a year They're carry up to 40% a year Incredibly incredibly well-run performance businesses They were by and away the best investors this year. Okay. We're gonna go lightning round from here Sacks do you have a best investor? Yeah, I said stand drunken miller. He y'all through a call last year He predicted that inflation would be lasting. This was a spring of 2021 when Transituary was the word of the day this year. He predicted the bear market rally. We had in July and August and I remember back at the coach who summoned in May they were around that time He was interviewed and he basically was saying that as soon as there was a bear market rally over the summer That he would then put a short position on. I don't know if he actually did that But he said he's gonna do that and then it turns out that the summer rally that we had was a dead cap bounce So he was right about that and now he is predicting a hard landing In 2023 with a deeper recession than many expect So sadly, I suspect he may be right yet again Friedberg best investor for you 2020 name. I yeah, I had drunken miller I indicated that he's been doing interviews pretty much every quarter for the last two years And he's been pounding the table telling everyone what's gonna happen and it all happened And even told people the trades in mid 2021 He said he was short long dated treasuries and he was long commodities And if you had put those two trades on at that time and held them to today You would have made a fortune and so I think he's extraordinary in his ability to kind of see macro in a way that others don't but also to take Extremely brave action with his portfolio. He's he's renowned for how big the bets are that he makes And how quickly he can change his mind when he's wrong and make another big bet to and still get himself out of the hole He's incredible. So I definitely give it to Stanley Gruck and the Lewis here when each 21 we did Our best turn around I picked Disney Chimoff Ford Friedberg. We were Should we stack this category house? What about the worst investor of 2022? Can we do that good? Chimoff? You want to freestyle tell us your worst investor of 2022? I mean, I'll put myself in the category along with anybody else who was long tech Based even if you can just bring please back up this Capital asset pricing model any of us that didn't understand this got run over This year and just to put some very specific numbers here There was a decent little tweet thread that Elon was a part of were he they actually calculated what the expected rate of return of Tesla was and it turned out to be almost 14% a year And so you know when you start to compound 14% over three four five years these numbers get very big very quickly And the reason why is that it has a huge beta and we're in a world now where the risk Rerate is quite high so all of us benefited from this equation essentially being upside down for the last 15 years And all of us who were over allocated into things that benefited from those dynamics Frankly got run over this year. So we were as a class the worst investors of 2022. Okay. Here we go Let's do our best turn around I am gonna go with uh me for me it's meta they were losing money Hand over fest they refused to do a rift and then finally Bestie Brad Gersoner said let's get fit. He did a memo and finally finally Zuckerberg made some cuts reportedly rumors. He's making a 15 10 or 15% cut I heard in the back channels right now based on performance So he's not calling it a riff or a layoff. You're just gonna cut the bottom 10 or 15% again So I think Zuck's gonna turn it around Anybody have a best turnaround. So you're saying Zuck mission accomplished You're going to turn around things turn around this year I'm going with meta. So your answer is meta was turned around by Zuck this year. Yes They got down to $85 and now they're up about what what 110 115. Yes. He turned it around at the end of the year It was like a hell-married at the end of the year. He's turned it around. I think he's gonna continue to yes. That is my position That sounds good. I bought the stock at 94 go with that Jacob. Okay, so if we're talking about very partial turn rounds here I would say I would say that you can measure the turnaround as of October 24th to now. Yes, exactly So San Francisco is still overall a mess, but there were a few positive events that happened over the past year And since we're looking back we should call these out. So first of all Back this is towards the beginning of the year we were called three members of the school board Most particularly Allison Collins remember her this was done by something like A 70 30 margin and 80 20 on on Collins This was the school board that had dragged its feet on school reopenings. They destroyed the merit-based Low-high school they wasted hours of meetings on a silly plan to remove the names of Names like Abraham Lincoln from the schools and any event they were removed then jk how you refer to this we got Chesa Boudin recalled By a 60 40 margin as San Francisco DA. This was the DA who whose agenda was decarceration He tried to release as many repeat offenders as possible The voters San Francisco had enough and then most recently The far less supervisor Gordon Mar just got rejected by his own community this November And the new tough DA broke Jenkins Got reelected in her own right after being appointed by London Breed So there's still a long way to go in San Francisco But there are definitely some green shoes that the electorate here has had enough and is looking for The let's say called the centrist Democrats as opposed to the radicals Okay, we're in the lightning round here. We're in hour three of the all-in podcast marathon this Telephone You got a best turnaround for 2022 hard hard hard one to give so any green shoots for 2022 as Sacks would say no, I mean Everything's just got the disaster Great freeberg anything that you have there may be no turnaround award until 2025 Fine, okay, yeah, we're a little split on this freeberg you got anything any great shoes You're in size a fucking viewpoint and I'll pick Zuck and meta that made so much sense 94 it's at a hundred seventeen. It's one of my best J trades I'm gonna take it. I'm gonna you also say Disney was your pick of the year or something I'm buying more I'm buying more Disney. I'm buying more this is I'm telling you Disney Warner which you talked about before yeah, and Facebook are three of my bit and You know are three of my big ones. Let's say worst human being here Well, I think look given that this is supposed to be the year 2022. I mean you gotta say that In 25 years because BF was the winner of this hands down. Okay, congratulations to SbF You are consensus worst human being for this year. I mean not ever but this year only for this year right Yeah, we we all hate you equally. Okay, who's who's number two? Why do you hate him? Why do I hate him? Because all those people lost their money And you know, there's some it's causing chaos. I feel terrible for all these people who lost money. That's why I hate him Oh, it's disgusting Did you see that the second most low? Did you see the two guys copped To please Caroline Ellison and Gary Wang like pancake flip and but it turns out that they actually did engineer a backdoor into FTX and Alina has been doing this for years Oh my god. Oh my god. That's game over you're getting 10 years. He's getting live game over Well, they're talking about an interesting defense strategy that we were um discussing in the chat. Oh, yeah, I think this is actually a fascinating defense strategy I think this is their own shot one of our besties had this theory that he was prescribed Two prescription drugs one was Adderall. What was the other one called? This was on the he said he said the patch is it's a drug I wasn't familiar with I guess it's a patch But when you combine these two things apparently it basically shuts down or kills the part of your brain That deals with inhibition inhibition. It's cocaine. Yeah, what if his defense strategy was yeah like only an insane person would do this And I was acting insane because I was prescribed these drugs that had these drug conflicts and it like killed part of my brain I mean and you think about every criminal on Wall Street said cocaine is my defense But this you could say he was maybe he was legally prescribed if you can show the prescription I by the way, I'm not saying yes should get him off I'm just we're basically workshopping what is only shot of his defense would be right well and think about it sex He acted manic after FFTX collapsed so that mania of doing 20 Twitter spaces Would be there's something so insane about what he did right that you that all it's almost like a Like a prescribed insanity defense like I was preside a drunk combination that made me insane Hmm anybody have a most low some company as we wrap the only way that you could come up without it's like you'd have to have two parents that were like law professors or something All right most most low some company For Mrs. Defense you know, yeah, my parents boohoo No, no, no, he'll claim insanity Jake Al he'll say of course. Yeah, and they'll have a fire I mean do we think that his parents aren't gonna help his defense? You know at this point this this kids got to go away for life. That's it Life wow, I think it's gotta be life. I think it's gotta be 30 plus years. I mean, it's just gonna be billions of dollars What kind of justice system do we have when people go away for 20 30 years per billion would you sentence? A decade per billion at least Yeah, I mean just you got No Sacks you gotta don't you think the justice system needs to look at other people who are in jail for selling cocaine for selling marijuana for for robbing a A convenience store. They'll put somebody away for robbing a convenience store for a decade or two Where do they get to put him in jail for just because somebody came in with a gun and robbed a convenience store They get 20 years this kid's gonna get off Screw that look. I think what what do you guys think the over under is here? You think it's lost? I'll set it at I'll set it at 35 years I think you're over. I'll take the over. I'll take 30. I think this is made off I said a good line then Which I think this is I think this is made off. No, I agree over on 30. Yeah, I think I think I said 35 I think it's gonna be a hunt multiple hundreds of years sentence. I agree and you'll be gone for life I think it's gonna be life, but I said a good line. Okay, most slow some company is FTX anybody want to go for a second? Keep moving. No, I'll add one. I'm gonna this year. I'm gonna give my last year I gave it to Tyson foods one of the largest slaughterer of animals on earth this year I'm going to give it to a company called inotiv I and OT IV This is the company that was busted by the feds for their animal abuse in their dog breeding facility Where 4,000 beagles were rescued one of which I adopted and this is a publicly created company stocks down 90 some odd percent Which I'm thrilled to see terrible business awful awful Kind of you know inhumane behavior and so I I want to kind of give them a special shout out this year Hmm look at you and you're getting the virtue signaling points of rescuing the dog to increase your two factor amongst besties well done I'll give that to Max Q factor Max Q factor. Yeah, anybody else have a loathsome. Yes. I'd like to pick this company Zibu Babuzah which Destroyed the environment for a bunch of endangered species that I would otherwise have used for various for pelt's for mice sweaters and such Yes, and I would like to go with blabbly blabbly blu Which was torturing puppies 18 of which I rescued and I am now have them in the jcal puppy rescue. I am the most sensitive and caring person Also, I would like to add C world I am in the process of raising money to build bigger Pools to eventually release all the orcas and captivity that is my new focus for next year. Okay Moving on. Oh god. Do we want to do best meme? Do we want to do best new tech? I'll do best new tech. I don't have a best meme. I'm going with fusion for best new tech I'm going with I'm gonna go with chat GPT. I think what was so impressive about chat GPT Um, and the experience that everyone's had using it is that it really for the first time I think elucidated Where uh these kind of machine learning tools can take us and what the kind of new product experience can be what generative AI can yield Uh things beyond I think the scope of what a lot of people were imagining before So it was really so revealing and as you guys know there's an absolute friggin tidal wave of people trying to start companies that are leveraging tools in generative AI Uh to kind of reinvent everything from what workplace tools enterprise software all the way through to media games and entertainment So that's why I think chat GPT was the most impressive new technology Best new tech traumatic and then sacks lightning round police best new tech alpha full three which basically has Almost near perfect accuracy and protein folding sacks best new tech. I can't improve on the chat GPT So yeah, let's keep rolling best Trend best trend in uh business and in the world mine is uh startups getting back and investors getting back to reality And the what I call the age of austerity the age of focus after the age of access That's the best trend in our world the age of austerity. What's your best trend For 2022 marginal cost of energy generation and storage is now in the low single digit pennies per kilowatt hour which basically means that Not only will energy be free and abundant, but it will I think over the next decade or two Create a massive peace dividend. It will rewrite our foreign policy. It will rewrite National security that is the reason why people should care about Energy transition not necessarily climate change although that's important. It's a distant second to keeping men and women out of war and Keeping our borders safe Well said anybody else have a best trend to catch up. I think it's so last year I'm I said the creator economy Which I think referred to all these kind of creators creating new products and and businesses beyond their content This year I think that the trend that was again enabled and demonstrated through chat GPT is the narrator economy I think this is going to be a really important trend going forward. We'll talk about it in the prediction episode But I think the idea that people are and they're starting to experience this in using chat GPT and Dolly and other kind of generative AI tools Is how much you can kind of narrate the product you want to see created and have it created for you on the fly And I think that that's a really kind of powerful mind shift for people and friendship for people Um, and I think it really starts to change a lot of the way that people behave and entertain themselves businesses operate and so on So I'd call it the narrator economy And I think it's really kind of starting to emerge. Okay. Do you have a trend sex? Yeah, I would say best trend is the growing Realization that the corporate media is failing does not tell the truth it has an agenda more and more people are opting out of it and going with independent media I think you know what Elon mentioned where we're going to start holding these corporate journalists the same standard on Twitter as regular citizens They're outraged by that, but that's a huge step in the right direction The fact of matter is is that the press or the media is the prism through its reality is refracted And if it's not giving us an accurate representation of the world We can't begin to solve our problems because we don't have accurate information And I think more and more people are waking up from the matrix and realizing that we're living in this media controlled simulation And again, I don't think we're going to make progress until the This power that the media seems to have over our reality gets gets broken Okay, let's go for worst trend my worst trend is the fed trying to play catch up the fed trying to play catch up Sorry, buddy The fed trying to play catch up is the worst trend for me oversteering into the crash What do you got chamath for the worst trend of 2012 trend was the continued profligate spending by the federal government We have record deficits record debt and this year we're ending the year by adding another 1.65 trillion dollars of spending that nobody Conceemingly account for it is truly the Christmas tree of Christmas trees in terms of bills So we have not gotten religion yet around Being measured in how we spend money good one worst trend sex last year my worst trend was authoritarianism growing all over the world And I think it was pretty decent prediction This year's up worst trend is the government colluding with big tech to engage in censorship This is how they're going to do the authoritarianism We talked about it with shellingberger and Elon this whole series of revelations notice the Twitter files We can see this collusion this cozy relationship between the sensors at Twitter and big tech and the bureaucrats at the FBI and dhs and Pentagon It this is a really disturbing dystopian relationship as we talked about it earlier And you know, I feel like we spend all this time talking about The authoritarianism in Russia and China we seem to be obsessed with combating that and going to war with that But we don't spend enough time talking about this growing authoritarianism at home The media doesn't seem to want to report on the Twitter files at all. Let's focus on stopping authoritarianism here Well said freedberg what's your worst trend? I worked for 2022 is what I would call interest rate mania And I think that this is the mania that we've been caught up in on this show that other people on our Thread people in the business community and the investing community Where everyone's obsession with did the Fed act soon enough or late enough and that interest rates ultimately drive successor failure with building businesses and making good investments All right, the truth is when interest rates go the wrong way good investments You know can kind of strengthen their way can can can make their way through those environments bad investments cannot Good businesses can make their way through and bad investments cannot and so I think our Armenia around the fact that interest rates and the Fed ultimately drove bad outcomes in businesses and investments is a flawed Kind of assertion and we all want to kind of get back to the drunken days Where you know a low interest rate environment enables us all to be successful and wealthy and I think that that's kind of change So I think it's time for us to get away from the interest rate media and focus more on solid investing and solid business pulling Okay, here we go lightning round. We got two to go favorite media of 2022 for me. It was top gun House of the dragon white Lotus 2, but I'm gonna pick my favorite here something you may not have heard of the film tar I highly recommend it, but I did like those other three tremendously. What do you got sacks for your favorite media of 2022 house of the dragon? I guess I enjoyed quite a bit Like you did I'll give a shout out to my movie dolly land which will be coming out next summer if we're gonna include podcast episodes I would give a shout out to the Unheard episode where Freddie Sayers interviews John Mirsheimer the professor of interastral relations He explains the origins of the Ukraine war and has some really pessimistic predictions about what might happen next I suggest everyone watch it if they want to understand this conflict and where it may be going next year Jamat you have any favorite media for 2022 you want to share? I thought yellowstone kicked ass. Absolutely incredible There's uh, I think it's on hulu Um, but there's a show with Steve Crel of this little short series called the patient Oh, thanks about a serial serial killer that kid naps his psychologist and locks him in his basement to try to help him prevent him killing more people I thought it was really really well done Never have I ever the latest season another just brilliant offering from Mindy Kaling. She's unbelievable Those are those are probably the top ones What do you got freeberg any media? Yeah, I read a book this year that I really liked Um, it's called the vital question by a guy named Nick Lane someone recommended it to me It's uh, he's a biochemist and he kind of talks a little bit about the origin of life on earth It really ties into this idea that there are certain call it principles of physics and statistics that make life predictive And predictable But I think the way that he kind of walks through how a lot of things emerge uh, uh, uh, in life And how life ultimately kind of developed on this planet are uh, are really well shown So yeah, I give his book a shout out. It was a really good rate That book the vital question is incredible the other one that he wrote which is called life ascending There's two books you must read if you don't want to be a lot of in my opinion all right I will also also for those people who don't understand the difference between power and energy You will learn what that is very good. I have two book recommendations putting the rabbit in the hat is a Brian Cox You may know him from secession He um has a great book and he reads the audiobook very enjoyable I'm halfway through Quentin Tarantino's cinema speculation and enjoying it very much so you will enjoy it tremendously Okay And now we do the Rudy Giuliani award for self-imolation this is for the person who poured Lider fluid and gasoline over themselves and let themselves on fire for no apparent reason I go with Kevin O'Leary Who's secured a 15 million dollar bag from FTX and then decided to try to defend it uh 18 ways to Sunday Burning whatever reputation he had who do you have in your Rudy Giuliani award? This will be controversial for you guys I'm gonna go with Elon Musk. I don't think that Elon put himself in the position that he did Uh, with bad intentions or without paying attention I think he's taken on a role in buying and running Twitter That is you know principled and uh, you know in his mind and many other people's minds a really important role that someone needs to play Unfortunately, I think his reputation has gotten really hurt because of You know that role he's not making a lot of friends and he's not he's causing a lot of reputational damage He obviously had a lot of good and important things he was working on prior to taking on the additional burden of Twitter And while many people appreciate his doing it. I think that it's causing him a lot of reputational damage And so yeah, I don't mean to kind of be offensive in saying that but I think he's he's gotten It's certainly been a hard thing to do it certainly been hard thing to do, but you're saying self-imolation freebrook Because he took it on himself. He could have just he took it on himself. Yeah, I'm not saying Okay, it's not like the Rudy Giuliani idiocy. I think he's taken on the burden of doing this and I think it's causing him a lot of reputational Okay, it's an interpretation of the award. What do you got your mom? I sacks and tumult well, I mean if if I were to Interpret the award. I think the way it was originally intended I think I got to give it to her shoul walker this year Unfortunately, and I wish Republicans would stop winning this award at least Hershel never gave any speeches next to a dildo shop, but uh, nonetheless I am so sorry that I'm so delighted sacks that you've been so self-aware about the follies on the dying maga The last throes of the Magonation. I want to find some Democrats to give this to I would have given it to that brain dead senator Uh from Pennsylvania. What's his name? Uh federman federman. Thank you. I wanted to give it to federman, but he won Yeah So I don't know what I'm supposed to do you know, it's like no listen when when a Republican Self-immolates like Rudy or Hershel or something like that they get laughed out of town And when the Democrat does it like a federman, they just get elected. So I don't know what to say. All right, you're I can get any final words here. God. I mean, I got to end this episode. It's gonna be the longest episode ever Who think it's poor poor producer Nick whoever signed the papers for the whole Search and seizure at maralago looks kind of like an idiot. So that that was not politically astute. Okay. I think you would say the FBI then okay Poorly handled perhaps actually a great. That's a great one actually if we're gonna get serious for a second The combination of revelations of we're gonna look over this whole year Remember Jason when I I basically spoke up at the time they rated maralago and said that it was heavy handed and unnecessary And now I keep telling you guys for years Donald Trump is an idiot's event minus this event Why all of you guys just project all of this like insane Genius evil level stuff. He's not capable of that. This is a simpleton who likes attention He stole a bunch of souvenirs that he didn't read when he was in the live position hasn't read now kept in a box downstairs Just to say he had them does exactly right. I was the one who championed the souvenir. I know he's a souvenir guy You said he was selling secrets to the South. No, I did not say that I said I was souvenirs. No, you suggested it. I did not Hold on you were telling Jared Kushner and elaborate conspiracy theory. I'm saying that doesn't look like I know it's not a conspiracy theory when you do it and and guys and This is the same person that basically in the in the beginning of his presidential campaign in 2016 In front of Hillary Clinton said absolutely. I bend the laws that you created the tax laws to my favor because I'm not stupid When she called him a tax dodger and it turns out after all these years He was telling the truth He basically once again the show ends with Trump. He's been a great 2022. No, but honestly like like did we learn anything except that these tax laws are Egregiously stupid and the only people that are consistently guaranteed to make money in these tax laws are real estate investors If you put these two things together a real estate investor who happened to be very poor at his job Which Trump turned out to be Packed billions of dollars of NOLs that he was able to use the washes taxes for years and years and by the way And he was clearly proud of it. He was just goading the Democrats in not releasing them They went through all this rigor parole and what did we find out he had huge NOLs? He had huge deductions and he paid no taxes Is that shocking to any of us? It's like it's like Shepel said he came out of the house Told everyone everything you think is going on inside that house is going on and went back and then he walked back inside the house Yeah You fell got it all right listen for David sacks The rainman For the queen of kinhwa sultan of science david freedberg and the dictator himself chamaff pao hapatia It has been an honor and a privilege Do this podcast with you gentlemen. This is the longest show in the history of the pod enjoy everybody RIP producer nex next 48 hours and we'll see everybody next year. Love you guys happy holidays. Love you best. I got you We're like your winners ride You We open source it to the fans and they've just gone crazy with Love you. I sweet Besties That's my dog We should all just get a room and just have one big huge or two because they're all just like this like sexual tension You just need to release the house I'm doing