The transcript from this week’s MIB: Scott Galloway on the Algebra of Happiness is below.
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This is Masters in Business with Barry Ritholtz on Bloomberg Radio.
BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, I have an extra special guest and what can I say about Professor Scott Galloway? You know him from before “The Four.” He is an outspoken critic of various technology companies. He says exactly what he thinks and feels. He does not mince words.
He has a brand-new book out called, “The Algebra of Happiness” that is already getting delightful reviews. I read it over the holiday weekend and found it to be a pleasant and enjoyable romp filled with all sorts of good advices. This is going to be a stocking stuffer and a dads and grads present for some time to come.
I can babble for a long time explaining to you what’s in our conversation, but rather than do that, I’m just to say with no further ado, my conversation with Scott Galloway.
Our special guest this week is our returning champion, our first four-time Masters in Business guest. You know him from his book, “The Four.” Amazon, Apple, Google and Facebook and how they’re destroying the world.
He is a professor of marketing at NYU Stern School of Business. His latest book, “The Algebra of Happiness” just came out to great reviews. Professor Scott Galloway, welcome to Bloomberg.
SCOTT GALLOWAY, PROFESSOR OF MARKETING, NYU STERN SCHOOL OF BUSINESS: Thanks, Barry. Great to be here.
RITHOLTZ: And you are a returning champion.
RITHOLTZ: You are our first four-time guest, at least here in the studio (and you are the first person, I think, I’ve had on consecutive books. No, that’s not true. I’ve had a few people for consecutive books.)
So, let’s start …
RITHOLTZ: … with a little background. You wrote “The Four” …
RITHOLTZ: It was effectively a class you were giving at NYU, looking at marketing and technology. Tell us about that.
GALLOWAY: So, the dirty secret of business school is that the second year is mostly a racket of trying to get double the tuition because you really does need the first year and …
RITHOLTZ: By the way, that’s the same racket with law school. You really only need the first two years.
GALLOWAY: First year. Yes.
RITHOLTZ: The third year is gravy.
GALLOWAY: Fifty percent more revenue for you and 100 percent more revenue for us. And my belief is that if we’re honest, we would — and focus on the kids’ economic security, we would teach for our courses in the second year, Amazon, Apple, Facebook and Google because to understand those four companies, is to understand media, retail, the economy, society, et cetera.
So, I teach a session on my class called The Four. I do a video on that class. It gets a million view, boom, book.
My most …
RITHOLTZ: By the way, that’s how I found you was “The Four Horsemen of the Internet” was one of your first videos, like who is this guy? This is really fascinating stuff.
GALLOWAY: Yes. That’s where I got a 1.1 million views. Approached by Penguin — Portfolio Random House which rolls right of the tongue great. It’s encouraging when your publisher can’t get their name right. [Editor: Spoken like a prof of branding and digital marketing]
But anyways, the most popular course is the last session and it’s where I take a bunch of great research out there and some of my own personal observations in expanse and I try to distill best practices around creating an arc of satisfaction into some algorithms and some equations and it’s called “The Algebra of Happiness.” It’s my most popular session. Did a video, 2 million views, boom, next book.
RITHOLTZ: And that next book is “The Algebra of Happiness”?
RITHOLTZ: So, 2 million views, how many of those are people in the United States? How much of that is international? Who is watching a video called “The Algebra of Happiness”?
GALLOWAY: So, I get — and this is weird, I get 70 percent male and about 80 percent of my audience is under the age of 35. So, I appeal to young males and I write a lot of this through the lens of the — the individual that is just inherently kind of wrong when they show up and that as a white heterosexual male and …
RITHOLTZ: That’s you.
GALLOWAY: That’s me. So, but yes, I find there’s an audience out there. I have a cottage industry in coaching and counseling the sons of my friends who are entering the workforce. But yes, it’s meant to be sort of OK, you think you come to business school for economic security which you’re really here for is to develop the skills and domain so that you can lead a rewarding life.
And we go through these observations in the last class and the kids seem to respond to it.
RITHOLTZ: So, it’ not about money. It’s not about the pursuit of more, although you talk about that in the book. There are some really poignant quotes that stayed with me.
Every wealthy person I know measures their net worth in frightening detail. This doesn’t sound like happiness. How much happiness does money really buy?
GALLOWAY: So, there is a correlation between money and happiness. Middle income people are happier than lower income people. The affluent are happier than middle income.
But that’s the bad news. There is a correlation. We live in a caste-less society. I believe that everyone has a responsibility to be economically sustainable.
So, bust-a-move towards economic security is what I told our kids. But once you get to economic security, housing, healthcare, can absorb an economic shock, can take nice vacations which according to most data, most cities, somewhere between a $100,000 and $150,000 a year. I think in New York, it’s probably close to $750,000 a year.
But once you get to that point, the correlation between money or incremental revenue monies and happiness flatlines.
GALLOWAY: So, the key is at that point in your life, once you get to economic security, if you’re fortunate enough to get there, the money — additional money is the ink in your pen and that is they can write different stories, it can make the current chapters burn brighter, but it’s not your story.
There’s also myth that billionaires are less happy than millionaires. They’re not, but they’re no happier either.
So, there’s a real skill to saying on what point do you stop howling in the money storm and take pause and say, well, what gives me satisfaction? Why am I happy? Because more money, one could give you more satisfaction.
The terrible thing about a number is similar to what in that great “Star Wars” episode, where Luke Skywalker is trying to convince Hans Solo to rescue Prince Leia, he says if you do this, you’ll get more money than you’d ever imagine and Hans Solo responds, I don’t know, I can’t imagine a lot of money.
So, if I said to you, Barry, I said, all right, what were your goals when you were 22 or 25? You say, well, by now, I would have probably hoped that I had a good relationship with my wife, some economic security, some relevance professionally and good health.
And I’m going to guess that you have most or all of those things.
RITHOLTZ: Pretty much. All four boxes.
GALLOWAY: But you also know how much you’re worth. So, you know approximately how much you’re worth and it’s pretty easy to imagine two, five, and 10x that number. And so …
RITHOLTZ: And that’s just tough …
GALLOWAY: You can’t imagine 10x? You can imagine double, right?
RITHOLTZ: No, I can imagine 10x …
GALLOWAY: You can imagine that. You’re a smart guy. You can imagine 10x.
GALLOWAY: so, and that creates — it’s easy to stay on the spinning wheel and/or the hamster wheel and I think it’s important that we have the discipline to say, OK, I need to, at some point, stop howling in the money storm if I’m fortunate enough to have met more than my basic needs and figure out what really is meaningful to me.
RITHOLTZ: That’s interesting. I know that I’ve made a number of choices career wise where I’ve turned down more money that I knew was going to be a miserable slog for what I think is a pretty reasonable lifestyle in pretty — I mean, I work a lot.
RITHOLTZ: But my wife calls me gainfully unemployed. I would be doing the same thing whether someone’s paying me or not.
So, there are choices you can make to not take the bigger higher-paying but horrific soul-sucking job and just pursue something. I like to think we’re making a difference on what we do that we’re — if we’re not denting the universe like Steve Jobs, at least we’re having a positive impact on people.
GALLOWAY: Yes. Well, I saw them on reverse order. Steve Jobs denied his blood under oath so he could avoid child support payments …
RITHOLTZ: Not a nice guy.
GALLOWAY: … when he was worth a quarter of a billion dollars.
So, we need more engaged fathers, not a better damn phone. But anyways, be that as it may. So, you brought up a notion of turning down money to pursue stuff that you would enjoy more and thinks there’s a larger purpose.
All of that’s important. However, however, I think some of the worse advice that kids get at Stern, we invite two types of speakers. We have three speakers a week, for our luncheon speakers. And it’s either supper interesting people or billionaires.
We have decided that if you aggregated a billion dollar, you must be able to opine on almost anything including life, spirituality. You’re the master of all things because you’ve aggregated a billion dollars.
And they end with what I think is some of the worse advice most of the time and that is tell the kids all one thing. And what is that one thing?
RITHOLTZ: Follow your dreams.
GALLOWAY: Follow your passion.
RITHOLTZ: Right. Go for it.
GALLOWAY: Which is just …
RITHOLTZ: Do what you love.
GALLOWAY: Such incredible BS because the guy — I tell people, if someone tells you to follow their passion — your passion, it means they’re already rich. And the guys on stage telling you that has probably made his money on iron or smelting.
So, the …
RITHOLTZ: Not exactly a passionate …
There you go.
GALLOWAY: So, what I think — my advice to kids, when I say kids, young adults, is find something — your job isn’t to find your passion. Your job …
RITHOLTZ: Find what you’re good at.
GALLOWAY: A hundred percent. And then invest directly (ph) to grit, perseverance, frustration, endurance surrounding the injustice that is called the workplace and become great at it.
And the accoutrements of being great at it. Economic security, the respect your colleagues, the camaraderie you develop with people in the agency of greatness will make you passionate about whatever it is.
But the problem with telling young people to follow their passion is where it ends up happening is work gets hard. It does for everybody.
And they think, well, maybe I’m not successful here, I don’t love it so it must not be my passion. I should move on. That’s called work.
You can’t hate it. I hated investment banking and I was no good at it. So, that was a sign to get out.
But the idea that Jay-Z followed his passion and is a billionaire. Assume you are not Jay-Z. Assume that like most 99 percent of people, you’re going to have to find something you’re good at, invest a ton of time and become great at it.
RITHOLTZ: I have to reference a disclaimer you have fairly early in the book.
RITHOLTZ: You write I have no academic credibility or credentials to indicate I should counsel people on how to live their lives. So, why did you write this?
GALLOWAY: So, this has been a journey of personal discovery. We’re talking about this off-mike. I struggle from what I would loosely call mild depression and issues with anger and my sister summarized the problem perfectly a couple years ago when I was speaking to her. She said, why are you so pissed off all the time?
And when I look at my blessings and I look at my mood, they don’t fit (ph) to one another and I decided that I would do some research around what are the best practices around people who are able to take stock at their blessings and translate that to their mood and their satisfaction with their own life.
And there’s a tremendous amount of great research out there. There’s best practices. There’s worse practices and I try and summarize them for their kids and turn it into a class. But it’s also been a great personal journey for me to try and figure out, OK, how can I ensure that I take that again? My blessings fits my mood.
RITHOLTZ: So, on that, there’s a huge body of research about the positive power of gratitude.
GALLOWAY: I never …
RITHOLTZ: You discussed that on the book. How does one live a more grateful life?
GALLOWAY: Well, there’s supposedly tricks and one of them is just writing them down. Supposed we write them down, they cement them. But I think there’s other things, too.
I think, especially with men, we have a problem communicating admiration and affection for other people. As a young man, especially when I grow up in the ’70s and ’80s, affection meant one or two things. You were trying to have sex with that person or you were a homosexual.
And in the ’70s or ’80s where heterosexual men, both of those things were considered either suspect or a bad thing, right? So …
RITHOLTZ: Times have changed.
GALLOWAY: Times have changed. And I think affection, if you look at mammals, if you look at where we’re happiest, if you look at what we’re meant too do, we’re pack animals and we’re meant to touch each other.
Now, unfortunately, because of just some outrageous and criminal behavior in the workplace, we’ve conflated masculinity with toxicity and we’ve said affection in the workplace is a bad thing and I understand that.
But I think men need to take back affection and the affection with their children expressive affection to their friends, and the reality is it just doesn’t take a ton of common sense to recognize when affection is unwelcome. But affection is a wonderful thing.
And also, just verbal admiration. Like, Barry, I think you’re an impressive guy. I think you have a really interesting career and I love the fact that you talk about your hobbies, you just seem like — you just seem like a guy that would a great mentor, a great uncle, the guy that people want to hang out with.
Saying that, most men when they say that, it was as if they’re giving up something. But admiration is a currency. That when I say that, that it somehow takes that away from me, especially young men.
So, what I encourage people to do or young man is to say, look, one of the greatest things that can take you off track is that don’t assume that people in your life are telepathic. Thinking loving thoughts about your friends and family doesn’t make you a loving person, you have to express these things and the greatest untapped resource in the world is the good things you feel about other people that you don’t articulate.
We assume that people telepathically understand that we admire them, that we respect them, that we’re fond of them, and I think the fastest way to increase your short-term happiness is to find the courage to when you — when you feel good things about other people to express them.
And quite frankly, it’s a little bit embarrassing. You make yourself vulnerable. Sometimes, it can even be off-putting to the other person. But on the whole, I think it’s one of the greatest hacks to feeling more grateful and being more happy. It’s just expressing all the good thoughts that run between your ears every day.
RITHOLTZ: So, you’re suggesting an individual can decide to be happy. Can decide to be grateful, can implement acts in order to achieve that state?
GALLOWAY: So, I think there are best practices and I don’t think there’s an equation and I also don’t — I want to — I want to disclose that I think there are certain forms of depression and neuroses that require outside intervention.
But there are through — and there is no one equation. So, the title is a little bit misleading. One happiness is a sensation, we’re talking about Kahneman before. What I’m really talking about is the decisions and investments you made through the course of your life such that the arc or the narrative of your life is a little bit more satisfying and the highs and lows that we all experience swing on a higher plane.
So, I don’t think there’s any one equation. People have to find their own route. But there are best and worst practices. So, the Harvard Grant Study, largest study of its kind on happiness found worst and best practices …
RITHOLTZ: Now, let me interrupt you. You tracked …
GALLOWAY: Four hundred men …
RITHOLTZ: Four hundred men over 75 years.
GALLOWAY: Yes. Yes. Over 80 years. And it’s interesting. It started, I think, in the ’20s. And what — which gives you sort of insight in the way we thought about people and what was important in the ’20s. we decided to try 400 men, right? Like …
GALLOWAY: … women’s happiness.
GALLOWAY: Nineteen-twenties, of course.
GALLOWAY: And no women, of course, is surprised by that.
And we’ve waited till — we tracked them for 80 years, so the scientists tracked them for 80 years. Everything they ate, what they did at work, all of their relationships, their sporting activity or lack thereof, their media. And then query them on a regular basis, their levels of happiness and satisfaction, and then aggregated the largest data set on longitudinal happiness ever.
And then said, what the best practices among the people who are happiest or seem more satisfied? What are the worst practices among who seem least satisfied?
One — and they had to swap up four principle scientists. So, let’s start with the worst practice. The one thing that was prevalent or consistent most often across the cohort with the lowest level of happiness, any guesses?
GALLOWAY: A hundred percent. Alcohol.
And that’s just surprising. By the way, this is what I call a do what I say, not what I do. I love alcohol. I feel as if I’ve got more out of alcohol than it’s gotten out of me, a great Churchill quote.
RITHOLTZ: Although you write in the book that in your 20s and 30s, alcohol messed with you.
GALLOWAY: Yes, it did. It did. And I’ll come back to that. But basically, alcohol was seen, in a lot of instances, as ruining relationships, taking people’s health, off-track careers, coming undone.
And what I — when I look back, when I first moved to New York in the ’80s and I would — I took a job at Morgan Stanley, every night I’d go out and get pretty much drunk with other people that felt like they were successful at a cool place downtown and it have sort of what I call artificial relevance and fabulousness to it.
And I found that overtime, I was less effective at work. I lost touch with a lot of people. I wasn’t investing in relationships with my family and I decided, after two years of that, that I was just going to dial it back.
And the problem I find with young people is that their litmus test to whether they have a problem with substances is they say am I addicted? Have I had an intervention? Am I living under a bridge?
And if they have a job and they’re well-liked and they’re doing well, they think, well, I don’t have a problem with substances …
RITHOLTZ: But it’s not that black and white. There are nuances here.
GALLOWAY: And 80 to 90 percent of substances abusers are functioning substance abusers. A better question is, if I dialed down X, Y, and Z substances whether it’s trans fats, whether it’s alcohol, whether it’s Pod, whether it’s shopping, would I just be better at a bunch of things?
And what I counsel my kids on or my students is, take stock of every external substance and imagine you did a half two-thirds, 80 percent more. Because there’s also, I think, this narrative that it has to be zero or one.
GALLOWAY: You either have to totally give it up or you don’t have a problem.
RITHOLTZ: Everything in moderation.
GALLOWAY: That’s a hundred percent.
RITHOLTZ: So, but for me, it was something where I felt a lot healthier, a lot better, and — but yes, that’s definitely the one thing that we kind of have is the best practice, if there is a hack and, of course, the students don’t want to get to the one thing, is they found that the cohort, that it was happiest, it was pretty straightforward, it was based on the depth and number of meaningful relationships in their lives.
At work, do you feel respected and admired? And do you respect and admire other people? Amongst your friends, do you get a sense of camaraderie and joy? And do they sense camaraderie and joy from you?
And at home, amongst your family, do you fill an intense level of support and love? And just as importantly, do you know they feel that sense of love and joy from you?
In this sense, the Harvard Grant Study burn through four principal sciences because they kept tying over the course of those 80 years. It summarizes hundred-and-something-page report and it has the best opening line of any academic study to summarize the findings and it’s the following, happiness is love, full stop.
And that is the one thing we find across almost all of these studies on happiness. That if your ability to invest in and maintain deep meaningful relationships across to your friends and at work and at home.
RITHOLTZ: Let’s talk about those students and I want to reference something in the book that I felt was fascinating. There is a chart effectively that looks like a smile that shows where people in their life cycle find happiness.
RITHOLTZ: When they’re young and when they’re old? Tell us about that.
GALLOWAY: Yes. This is just — it’s gorgeous data, it’s across all studies and across — getting across ethnic groups, income cohorts, cultures. We found — or they find something very similar. And that is people are generally happiest in the beginning and the ends of their lives. And that is from zero to 25, it’s the stuff of Disneyland, your first car, exploration of self, spilling into adulthood, football games. Just magic, right?
And then, kind of from 25-45, it’s what I call the life-gets-real phase. And that is you find that you’re not going to have a fragrance named after you, you’re likely not going to be a senator.
Someone you love gets sick and die. Having children is stressful. What’s interestingly we don’t like to talk about is that when we survey or when they survey people with kids and without kids, on average, the people without kids are actually happier.
RITHOLTZ: Without kids?
GALLOWAY: Without kids.
RITHOLTZ: That’s surprising.
GALLOWAY: It is surprising. Now at the end of life, people consistently say we have a hormone that releases — that erases the bad times and we feel more rewarding and more fulfilled having had kids. But during it, they’re less happy.
It’s stressful. Kids are stressful. They put economic pressure on you. One of my favorite things is kids ruin everything. Babies are awful. And then they get less awful, but still, it’s — kids are difficult.
So, you have, and then you find that you face economic stress usually at some point in your life with the cycles. And you find you wake up oftentimes, sometimes 25, 35, and 45 and you’re disappointed. We have a tendency to anchor off the most successful person we know.
GALLOWAY: We have a tendency to believe what college and our parents told us that we can be anything …
RITHOLTZ: Which is — this is why Facebook and Instagram are so toxic.
GALLOWAY: Well, it’s especially toxic because, again, we have this wonderful competitiveness gene that ensures that the next generation will be taller, faster, smarter, stronger. And by anchoring and aspiring after the most successful person we do, that has a a very positive evolutionary benefit but it also makes us feel bad about ourselves.
And the thing about Instagram is that these people become somewhat relatable and Alain De Botton who I think is going to go down as the most interesting thinker says envy is a function of familiarity. So, we don’t envy the queen, we don’t say I wish I were the queen. I wish I were rolling around in that carriage.
But on Instagram, you not only see what you’re missing out on, you see it play out in real time amongst your friends and it’s kind of their success is shoved in your face, especially when young people are unable to really modulate that.
But 25 to 45 are usually — is usually or at least happiest time. And then something wonderful happens in your 50s and in your — or younger if you’re soulful (ph) and you start finding appreciation and joy in places you didn’t find before.
I used to surf when I was younger because I thought that was cool. Now, I’m kind of fascinated by the idea I can be out there and I wouldn’t even call it surfing. It’s more clinging to a piece of fiberglass for dear life.
But the fact that several thousand tons will emerge because of the geometry of the sand floor and the way the sun feels and the — I mean, you just — you’re just joyous, right? These small things that look like you called children become more joyous, maybe it takes to stock your blessings, maybe have a little bit economic security, you realize life is finite, you appreciate your help, you find joy in things you’d never find joy in, nature or art.
And you get happier. And the cohort, is happiest would logically be the cohort that should be the least happy and that’s people will start to have their health fail and as seniors who are consistently the happiest. So, the advice here is simple, in your 20s and 30s, among people who are having a tough time and that is — this is a — this is a normal part of the journey. And the key is to keep on keeping on, that happiness waits for you.
RITHOLTZ: Let’s roll back from the ’50s, ’60s, and in later years to those ’30s and ’40s. You write in the book, this is the time of your life where you have to make your bones, where you’re going to work hard, you’re going to put in a lot of hours, but you need to do that during those decades, so the future and happiness arises.
GALLOWAY: So, I survey the kids, again, the students about whether — how much money they expect to be making in 10 and 20 and 30 years. And 90 plus percent of them expect to be in the top one percent.
So, granted there’s a selection bias because the second-year business school in New York, the average salary coming out of school is 118,000 …
GALLOWAY: Which is a lot of money. That already …
RITHOLTZ: Double the median of …
GALLOWAY: That already puts them in kind of that 85th of 88th percentile.
GALLOWAY: And they expect to be in the 99th by the time they’re 35 or 40. In my observation, and I believe there’s data to back this up, is that if you expect in the 99th percentile, balance is a myth.
And we all know somebody who is good-looking, in great shape, has good relationships with their parents, donates time at the ASPCA, and has a food blog. Assume you are not that person, unless you’re smart enough to inherit a lot of money, if you expect to be in the top economic weight class, you should expect to do not much else other than focus on your career in your 20s and 30s.
And by the way, I want to acknowledge, that’s not the road to happiness for everybody. A lot of people say, I’m not going to howl in the money storm. I’m going to find a way to lower my burn and I’m not going to let money dictate my happiness.
We live in a capitalist society and most of the people we know have decided that they want a certain level of economic security and success and it has to be an honest conversation with yourself.
In my 20s and 30s, I don’t know about you, Barry, I don’t remember much else than working. And I want to be clear, it came with a price. I’m bald, I burn through my first marriage and I’m not going to totally abdicate personal responsibility for those failures, but I think a lot of it was the fact that for two decades, I was very focused on economic security and not much else.
So, I think young people, just to have an honest — have to have an honest conversation because we’re told when we’re young, you can have it all.
Well, I’m sorry, I’m not here with a message of hope. It’s difficult to have it all and everything is a trade-off. So, I have a lot of balance now as you do because I didn’t have very much when I was young. And that was a conscious decision I made.
RITHOLTZ: Quite interesting. So, we talked a bit about technology.
RITHOLTZ: Let’s get into some of the details about this.
RITHOLTZ: Because your previous book obviously delved into some areas. You made some bold forecasts.
RITHOLTZ: Some of which were incredibly prescient. You said a year ahead of time, hey, Amazon should buy Whole Foods, it will give them a giant footprint, blah-blah-blah. And they did.
Were you, at all, surprised by this whole Amazon HQ debacle?
GALLOWAY: Well, so, look, and I’m boasting here. But the beginning of 2018, I said this isn’t a contest, it’s a con. And that is, I’ve been on seven public company boards, a dozen private company boards, and I’ve been through four headquarter relocations.
And in retrospect, it all came down to one thing and that is where the CEO wanted to spend more time where he was — he or she was president of their golf club or where his next wife was living. When you are a 55-year-old man with $155 billion, it means you have more options than anyone in the world and you are the master of no.
So, query me this, a guy who is 55 with a $155 billion, is he going to spend 12 minutes much less 12 weeks in Indianapolis? Is the wealthiest man in the world going to decide to roll in Columbus, Ohio?
And this is the sophisticated analysis I did, Barry. If Bezos have four homes. One in Seattle, one in L.A., one in the Upper East Side, and one in Kalorama, D.C. L.A. made no sense because I couldn’t justify that, because geographically, it would make no sense to have a headquarters just down the coast.
So, I said on Fox, CNN, and CNBC, this is all a ruse. They have gamified this to extract a pound of flesh from municipal, police, fire, and school departments and transfer it to Amazon shareholders but they have absolutely no intention of going anywhere but D.C. and New York. And I was wrong, it was both.
RITHOLTZ: Right. You said D.C. or New York …
GALLOWAY: I said D.C. or New York and I was wrong. They picked both. This wasn’t a contest, it was a con. And by the way, while I’m on a riff here, remember that terrible imagery that there were that kind of race baiting that Reagan engaged in, the image of a welfare mother, a welfare queen, right?
RITHOLTZ: Right. Driving the Cadillac.
GALLOWAY: Yes. And individual gaming the system, right? And taking our tax dollars to their benefit.
The mother of all welfare queens is Jeff Bezos because he never sells a stock triggering a capital gain, meaning he never ever leaks taxes. Never pays taxes. So, how does he finance his lifestyle, Barry? He borrows money at one and a half to two and a half percent against his stock at JPMorgan and then 17 percent of every subsidy given to Amazon, whether they locate a data center or headquarter goes in to his pocket.
So, if you look at our economy with $20 trillion, $5 trillion government, $600 billion goes to the military or whatever …
GALLOWAY: … Social Security, an outflow is to the wealthiest man in the world. Jeff Bezos is a — he’s literally the mother of all welfare queens. And Alexa is just a good thing.
RITHOLTZ: So, let me push back on that a little bit.
RITHOLTZ: So, I am no stranger to corporate welfare queens.
RITHOLTZ: And to me, the biggest offenders are the Wal-Marts and the McDonald’s, the companies who have gained the system …
GALLOWAY: The food stamps.
RITHOLTZ: Right. The ones who figured out how to charge — how to pay as little as they possibly can …
GALLOWAY: And then have government assistance.
RITHOLTZ: Right. Remember a couple years ago? McDonald’s literally had a McHelpline (ph) so that they could get their employees on food stamps and aid to dependent children. And when you look at the highest employers of government assistance on a state-by-state basis, it’s invariably Walmart and/or McDonald’s.
Now, over the past five years, they’ve improved a lot. I can’t blame Bezos for, A, not showing a profit by reinvesting the money. They purposefully are a low-profit company. No profits mean no taxes. And B, if he chooses not to sell his stock, again, I can’t push back too hard on that.
RITHOLTZ: But the point that, hey, the wealthiest man in the world, this is one of the highest market cap — one of three biggest market cap companies in the world, pay your fair share of taxes.
GALLOWAY: Hundred percent.
RITHOLTZ: That, nobody can argue with.
GALLOWAY: So, you said a lot there. And I think at the end of the day, we have to have greater minimum wage. It hasn’t kept pace with inflation.
And Walmart and all of these companies should be probably paying more money and the government should be paying less to such that these people can survive. I acknowledge the point.
Now, whether or not it’s what is worse having billions or tens of billions of dollars spread across low-income people that working poor or going out to the wealthiest men in the world, I would argue that the latter is worse.
I don’t Jeff Bezos is doing anything wrong. I think the man in the mirror, the guilty party here is you and me who haven’t elected officials who were smart enough to recognize that the markets have gone through a fundamental shift and when a company can become the third most valuable company in the world and is on its way to becoming the most valuable company on the world, when he can effectively pay no taxes because the markets don’t demand profits or meaningful profits, we have an economic and taxation construct that no longer works for our society.
We can’t have a functioning economy when the most successful company in the world, Amazon, pays 1.4 billion in taxes since 2008 and Wal-Mart has paid 64 billion.
GALLOWAY: I’m not saying they’ve done anything wrong, but our economy can’t operate.
So, even in France, we immediately think that any idea from anywhere else is socialist or stupid, that we have a monopoly on good ideas. But France has basically said, look, we give up. Your tax lawyers are smarter than our tax authorities, so we’re going to tax you on your topline revenues.
Brazil is doing the same thing. And Britain, Google registers about 6 billion sterling in business every year and for the purposes of profitability and taxation, they report a 50,000-pound profit every year.
On a product that’s going to be …
RITHOLTZ: $6 billion?
GALLOWAY: On sic (ph) note, 10 billion …
RITHOLTZ: Ten billion …
GALLOWAY: Seven and a half, right?
GALLOWAY: What is that? One twenty-seven? So, about 7.6 billion.
GALLOWAY: And they’ve decided what they report to the government that can be taxed is 50,000 pounds. And it’s expensive to do business. In London, it’s not that expensive.
So, we are in a system now where when you have the most successful company in the world not paying taxes, when you have companies that game the system and can avoid taxes by locating in the Isle of Jersey. Apple’s international headquarters is in a small island off the British coast. I mean, this is arguably, these companies are not only masters of technology or masters in business, they’re masters of tax avoidance and we haven’t elected officials that did acknowledge and will counter what is a regressive tax and that is the most successful people, the most successful companies, pay less taxes.
And taxation is largely a zero-sum game which means the following, small and medium-sized companies have to pay more. So, we have basically all right, if you win the lottery …
RITHOLTZ: And lower- and middle-income people affect …
GALLOWAY: Hundred percent.
So, this is — we have institutionalized a regressive corporate tax structure.
RITHOLTZ: And that’s problematic. And to go to your point that Amazon headquarter search was a con, today, just today, we learned that they’re looking to take 50,000 or a 100,000 feet of space in Manhattan …
RITHOLTZ: … for offices … So, the whole thing was just a nonsense …
GALLOWAY: A total rouse.
RITHOLTZ: An they need to be at this location. They need to have access to the talent or whatever else is here and the whole thing was just …
GALLOWAY: Look. I think this reflects — well, I think this reflects that the board of Amazon and Jeff Bezos-like character in code because this was nothing but an elegant transfer of cons from municipal, fire, police, and school districts into the shareholder’s pockets of Amazon shareholders.
To their credit, Google and Apple are all both adding thousands of jobs in New York. Why? We have three world-class universities here. It’s s a fantastic place to do business.
And you know what? That comes at a cost. The worst poker players in the world? Bill De Blasio and Governour Cuomo. They were always coming here. They were always coming here.
And even when they pulled out and said, we’re angry …
GALLOWAY: No, they’re coming here. They’re just doing it quietly because bottom line, the wealthiest man in the world doesn’t need to commute to Ohio. He’s not going to.
RITHOLTZ: So, let’s talk about a couple of our other favorite tech companies. I read something fascinating. Actually, I emailed you the story about WeWork in their new investment subsidiary that’s going to buy the buildings that they’re going to sublet.
RITHOLTZ: No, I haven’t bought into WeWork as a Ponzi scheme, although — and I know you’ve said some harsh things about them, but them but the idea that they’re going to invest in the buildings that they then sublet to themselves starts to smell like old cheese a little bit.
GALLOWAY: Yes. It’s so like — the most overvalued private company until about two months ago was Uber. And they were claiming that they were worth $120 billion. Now …
GALLOWAY: They’re not even worth 60 or 70. This company could execute perfectly and still be cut in half in terms of any reasonable …
RITHOLTZ: Uber. We’re talking about Uber?
GALLOWAY: Hundred percent.
RITHOLTZ: Do you agree that they waited too long to go public and left so much value on the table because they got greedy or …
GALLOWAY: No …
RITHOLTZ: … what’s your thinking behind that?
GALLOWAY: I think that they should have never gone public and the private markets …
GALLOWAY: … are now more amenable to companies like this. And essentially, here’s a better prediction. When everyone talks about Uber, Tesla going out of business, I think the NASDAQ and the NYSE are going out of business.
RITHOLTZ: Wait. We’ll come back to that. Roll back a sec. Uber which has 30 billion 0r 40 billion in venture capital …
RITHOLTZ: How did they not go public? There’s no exit for tons and tons of VCs who aren’t looking for a five percent a year for a million years.
GALLOWAY: Their secondary market is now in the private markets. So, there’s liquidity in the private markets, there never used to be. Now, of course …
RITHOLTZ: Not $80 billion worth, not a hundred …
GALLOWAY: Not — yes, they raised (ph) — that’s a fair point. They probably can raise a billion but there were secondary traits taken place. There’s secondary traits right now in stocks. And you can buy shares in most private companies now with secondary business.
Liquidity, now again, the retail investor who loses, the retail investor now gets to buy stuff when it’s totally overvalued and there’s no other source of that kind of capital.
But going back to the most — now, the most overvalued private company in the world as WeWwork.
GALLOWAY: Supposedly, it’s being valued at $40 billion, I think they did 2 billion in revenue and loss, too. I mean, this — and they have their own metrics. They call it …
RITHOLTZ: Hey, that’s a 50 percent margin.
GALLOWAY: There you go.
RITHOLTZ: That’s fantastic.
GALLOWAY: And they call it community-based EBITDA …
GALLOWAY: So, and if you do the analysis and one guy, I think maybe even Bloomberg did the analysis and said based on this valuation, the floor that we work leases is now worth more than the building.
RITHOLTZ: The whole building. Right.
GALLOWAY: So, and you have — and you have a company sort of investing long, taking 10-year leases and then going short on its revenue.
GALLOWAY: Because which — and that’s the value is there are being a demand around short-term supply. But the problem is …
RITHOLTZ: … they’re in trouble.
GALLOWAY: Huge trouble.
And even — again, this company executes perfectly. It’s not worth — I mean, it’s Regis with IPA beer. Remember Regis?
GALLOWAY: It’s cooler, it’s a great concept. They built a great brand. I think you and I could probably build a great brand around a $2 billion business if we’re allowed to lose $2 billion.
This company is a train wreck in terms valuation.
RITHOLTZ: Really? What’s going to happen with the IPO? Will there be an IPO?
GALLOWAY: That — it will be really interesting to see if WeWork can get out. I wonder if the marketplace is starting to exit the consensual hallucination between unicorn status and all these BS words. I like to do a word cloud across every prospectus and then Lyft and Uber where you saw things like network effect, flywheel effect, autonomous driving.
First off, there’s no evidence that autonomous driving will be either good nor bad for Uber and Lyft.
RITHOLTZ: It just means they don’t have to pay the drivers. They pay a little more for the car and no driver.
GALLOWAY: But quite frankly, their economic advantages, they figured out a way to find 4 million people who will work for below minimum wage.
GALLOWAY: That’s not a good thing it’s …
RITHOLTZ: What about four million cars for zero wage?
GALLOWAY: But who garners the economic value there? It will be the engineers that create that technology …
GALLOWAY: And why is that going to be Uber and not Google which is the greatest concentration of IQ ever?
Anyway, I think you could argue both ways what’s going to happen there. What Uber has been able to figure out is a flywheel effect and that is has launched a new business on this incredible platform, UberEATS because there’s real value in Uber. It’s a global brand. It’s typically the first and the last brand that global affluent interact with when they’re on a foreign city.
They’ve got tremendous data. They’ve got a fantastic brand, there’s culture of innovation. There’s a lot of things they could do there. So, if they execute perfectly, they’re only going to be worth with BMW is worth which is around $30 billion or the stock’s going to get cut in half.
The company that could go to zero if they get acquired is Lyft. There is no network effect there. There is no global brand. There is no flywheel effect …
GALLOWAY: It’s just a company hemorrhaging money.
RITHOLTZ: You don’t think that there will be space in the in the market for a number two to Uber’s number one?
GALLOWAY: I don’t — here’s a thing about — so, it’s easy to talk down stocks. A company that I think is undervalued is Airbnb. Because what you need with Airbnb is you need local — you need local supply, you need apartments, and the same way with ride-hailing, you need local supply. You use drivers in Cleveland.
But with ride-hailing, all you need is local demand and that is you and I could start a ride-hailing company here in New York and create demand and supply.
With Airbnb, you need local supply but you need global demand.
GALLOWAY: That the majority of people coming in to Cleveland are from Scandinavia and Cape Town and all manner of cities …
GALLOWAY: … around the world. So, they extraordinary moat around their business. But ride-hailing has very few moats, low entry, a lot of local players. It’s a price war. They convince the consumer.
The $20 worth of service is worth $14. They’re not afraid to go after each other. They have a decent amount of cheap capital. This is going to get very ugly.
So, Lyft, I think that’s either — Lyft gets maybe bought at some point, but you can imagine Lyft going to zero, there’s real value in Uber, real value, maybe even $20 billion or $30 billion in value, but at 60? I have a difficult time making the argument for how this company, in any way, justifies that type of job.
RITHOLTZ: We have been speaking with Prof. Scott Galloway of NYU Stern. If you enjoy this conversation, well, be sure and come back for the podcast extras where we keep the tapes rolling and continue discussing all things technology and happiness related.
We love your comments, feedback, and suggestions. Write to us at [email protected] Be sure and check out my daily column. You can find that on bloomberg.com. Follow me on twitter @ritholtz. I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio.
Welcome to the podcast. Scott. Thanks so much for doing this. I have to tell you …
RITHOLTZ: I plowed through the book over the holiday weekend.
GALLOWAY: Thanks, Barry.
RITHOLTZ: I found it like just a fun, fast read. It is — literally sitting on the beach out in the Hamptons …
RITHOLTZ: And I really enjoyed it. I’m shocked at how revealing you are in the book. You basically say, here, I’m naked, warts and all. That’s a challenging thing to do.
GALLOWAY: Yes. What I found, though, Barry, is that when you’re authentic and you try to be open about — like I’m very good at talking about my victories. I can do that …
RITHOLTZ: Aren’t we all?
GALLOWAY: … pretty well.
GALLOWAY: So, talking about my shortcomings and some of the things that I’ve struggled with, what you find is there’s a lot of people out there, some that you know very well, some strangers and they reach out and find out other people struggle with stuff.
RITHOLTZ: See, I would be — so, I happen to know what a deep, dark, depraved person I am on the inside and I would be really …
GALLOWAY: Mostly depraved …
RITHOLTZ: I would be …
GALLOWAY: You’re not that deep. But you’re just mostly depraved.
RITHOLTZ: So, my depravity has depth. That’s what I was referring to.
GALLOWAY: There you go.
RITHOLTZ: But I would be sort of afraid for people to — so, I personally think I’ve come a long way. But I think people will be shocked to know the sort of screw up I was in my 20s.
RITHOLTZ: First of all, I don’t know what to do with myself.
GALLOWAY: The functional families are the ones you don’t know, Barry.
RITHOLTZ: Maybe. In my 20s, I didn’t know what to do with myself.
RITHOLTZ: If you grow on Long Island and you’re a Jewish male you’re — don’t — you don’t have a purpose, well, you go to law school.
RITHOLTZ: That’s pretty much …
GALLOWAY: That’s a grad school course (ph). For the elite and the aimless.
RITHOLTZ: That’s exactly right.
RITHOLTZ: And so, by time I got out of law school, I knew two things. I knew I was fascinated by the intellectual debate surrounding jurisprudence and I knew, for sure, I did not want to be a lawyer. But it took me …
GALLOWAY: But it’s a great education.
RITHOLTZ: Fantastic education. Arguably, I’ve made the claim that law schools is superior education to business school because, at least, the way business school used to be taught, it would fill people’s heads with how business should be run. Whereas law school teaches you how to think and …
GALLOWAY: And also to write. Yes.
RITHOLTZ: A 100 percent.
RITHOLTZ: And so, I was a screwup in my 20s and even my early 30s. It took me until I was — my wife kicked me in the butt and said figure out what the hell you’re going to do and go do it. You’re sort of …
GALLOWAY: Don’t kid yourself. You’re still a screwup.
RITHOLTZ: Don’t sell you short. You’re …
GALLOWAY: We’re all trying to figure out. The kids, where you’re putting one step — one foot in front of the other and then hopefully, along the way, making small investments and relationships. And one of the — we talked about — there’s a finance show or a business show.
We talked about the magic of compound interest. Put …
GALLOWAY: … a thousand dollars a month, a quarter, a year. When you’re a young person, you wake up and you have a couple hundred grand when you’re older.
The same is true with relationships. There’s evidence that small investments, when you’re a younger person that are consistent, a quick text message, a call, a note saying, hey, I’m sorry, I heard about this or congratulating people. Finding time for the reunion. Finding time for weddings.
You wake up you’ve made those little investment, you find that you have a lot of meaningful relationships. Whether you wake up and that relationship is just more meaningful. And so, just as we tell young people to be disciplined about making short-term investment or small investments as they’re young, I think all of us is going to start right away and start making little investments across a broader set of relationships.
And then I think you do wake up one day and think, wow, there’s a lot more in this bank that I’d ever imagined that does — compound interest, applies to relationships.
Most people, when asked what is the single — singular relationship in their life, most say or across, their mom.
GALLOWAY: And when you think about it, why is that? Some of its instinctual, but a lot of it is your mom is the premier investor. She began making little investments in you every day from a very early point and you end up with a relationship that is singular when you’re older.
And I think that’s a lesson in the importance of not only investing and saving early, but making an effort to make small, tiny, regular investments in relationships from a young age.
RITHOLTZ: I’m going to tell you something that you did for me, unknowingly.
RITHOLTZ: You write about giving your mom a good death.
RITHOLTZ: In the book and it’s actually a very touching story and how you explained how significant that is to you personally. So, my mom is fairly healthy but she’s 83. You don’t live forever. Oblivion beckons.
And early — and it was was something that wasn’t actually from the book, it ended up in the book, it was from No Malice from your website.
GALLOWAY: Yes. No Mercy/No Malice.
RITHOLTZ: No Mercy/No Malice. And basically, you talked about that, maybe it was in the original post about your mom.
RITHOLTZ: And my mom is — there’s two problems with my mom. She’s giant pain in the neck and I’m just like her …
GALLOWAY: I call (ph) the mom.
RITHOLTZ: But — no, no. But even worse, I’m just like her. I used to jokingly tell my wife, I was born in to a wealthy family, just the wrong family took me home. I really should’ve been royalty. The wrong family took me home. And she goes, I’ve met your mother. There’s no way the wrong family took you home.
And the fact that I’m her clone, and so I get to be irritated by all her habits that I have in spades, you’re post on that last year sort of softens how I interact with her for the better.
GALLOWAY: Yes. Look, everyone has, I don’t call it love, hey, but …
RITHOLTZ: She installed all the buttons — not only does she know how to push your buttons to make you crazy, she’s the one who installed that.
GALLOWAY: And just look at how your wife treats her parents. You’re just like, gosh, how come you’re so inpatient with them.
But anyways, for me, there’s a lot of research and a lot of literature out there on the reward or lack thereof raising kids. I don’t think what we talk a lot about, because it’s, I guess, it’s scary, is the reward of giving someone a good exit. And I recognize them during a lot of virtue signaling here.
But I was in a position …
RITHOLTZ: I hate that phrase, by the way.
GALLOWAY: Virtue signaling?
RITHOLTZ: Virtue signaling is just an ad hominem attack against people you don’t like. Hold that aside, I’ll …
GALLOWAY: So, I don’t like myself?
RITHOLTZ: No, no. I mean, when people accuse you of virtue signaling … they’re not attacking your idea that’s saying you’re just — well …
GALLOWAY: Yes. For me, it’s imposter syndrome where I think I sound like a better person I am and I want to acknowledge …
RITHOLTZ: Well, if you could talk about that also …
GALLOWAY: Hold me, Barry.
Anyways, I was in a position and a lot of people aren’t. But my mom was the light of my life. Raised me alone on a secretary salary, but it’s not a sob story. We had a nice life. There’s a lot of discipline and a lot of love in my household.
And I decided I had the resources and I have the flexibility to take some time off and I moved in with her. I asked her what — when she was diagnosed with terminal cancer, I said what’s on your bucket list? Right? That’s what a son does, right?
GALLOWAY: And she said I only have one thing on my bucket list. And I said what’s that? And she said I want to die at home. I’m like, OK, we can make that happen. It’s not going be easy, but I can figure that out.
I moved in with her. So, I moved in to the Del Webb Active Living Seniors Community in Summerlin, Nevada. And during the day, I would manage my mom’s healthcare and we watch jeopardy and look at old photos. And at night, I go downtown to the Strip, get drunk, and party with strippers. It was a very unusual, yet very rewarding part of my life.
And I will cherish that. I’m most proud, I think of my children, my professional — modest professional success, and also just giving my mom the right exit. And I’m blessed because a lot of people can’t do that.
But what I say to people is if you’re in a — if you’re in a position to help your parents exit more dignified and I’m not talking about it’s the right thing and you’re a good person, it’s very rewarding. She and I, really, nothing went unsaid. And it was — it was a nice — it was a very rewarding opportunity and something that I’ll cherish for the rest of my life.
RITHOLTZ: I found that to be really inspirational and something that was on was really interesting in the book..
Let’s talk about some other things from the book that I thought was fascinating. While you’re young, get credentialed and get yourself to a city.
GALLOWAY: So, we live in a caste system. We like to think it’s a meritocracy. U.S. is very much and increasingly become a castle system.
RITHOLTZ: And explain what that caste system is.
GALLOWAY: Simple. It’s where you went to college. And that it’s shown me two things. I can tell you how much someone is going to make within fairly tight band based on two things, where they’re certified, where they’re credentialed in terms of the college they went to and their ZIP code.
Show me someone who has an engineering degree from Dartmouth who lives in New York or San Francisco. I’m going to show you someone who’s making a 150K year about a time they’re 30. Show me someone who’s a high school dropout living in Little Rock. That person’s likely (ph) making 40K about the time they’re 30.
We live in a caste system. Get certified. And I recognize that college isn’t always the right thing for everybody. I don’t care if it’s a Class 3 driver’s license, aesthetician’s license, or a member — a union card, you have to get credentialed.
Also, while you’re young, get to a city. Two thirds of the economic growth is going to happen in the top 20 cities in America over the next 20 to 30 years. It gets harder and harder to be in a city when you get older and start collecting dogs and kids, so get there while you’re young.
When people constantly come up to me and say my son’s thinking about dropping out of college, maybe he’s the next Steve Jobs or anything, assume your kid is not Steve Jobs. And we have this very well publicized examples of college dropouts going on to do well and that is …
RITHOLTZ: Three of them …
GALLOWAY: That’s dangerous.
RITHOLTZ: You have Bill Gates, Mark Zuckerberg, and Steve Jobs. How many of — tell me about the rest of the Fortune 1,000, top 100 people in those companies? How many of those dropped out of college?
GALLOWAY: Yes. Very few. And most have graduate degrees. Increasingly fewer but almost all of them have a college degree.
Now, the problem is, is the man in the mirror test. Academics, we have become drunk on exclusivity. We no longer see ourselves as public servants. We see ourselves as luxury brands and we brag about the fact that 90 percent of people that applied to NYU don’t get in which is tantamount to a housing or a homeless shelter bragging that they turned away 90 percent of the people who showed up to sleep there that night.
That is not a good thing. You and I both went remarkable schools. It gave us remarkable opportunities and we’ve talked about this. Both you and I, were remarkably unremarkable. And if we hadn’t had the generosity of New York and California taxpayers respectively, pick us up by the scruff of our neck and fling us forward in to opportunity, you — and neither you nor I would be here right now.
RITHOLTZ: So, let’s so let’s talk about that a sec because it touches on both the credentials and your mom. I love this story from the book.
You gotten — you had gotten rejected by UCLA and your mother kicks you in the butt and says re-apply.
RITHOLTZ: Ma, I just got rejected three months ago. It doesn’t matter reapply.
RITHOLTZ: And you write to them, I’m a native son of California raised by an immigrant single mother who was a secretary. If you don’t let me, I’m going to be installing shelving for the rest of my life.
GALLOWAY: Yes. My parents both dropped out of school. They were taken out of school when they were 13 to work for their families in London and in Glasgow and they came here. And I either — I could either live at home and go to UCLA or I wasn’t going to college. We just didn’t have the money for that.
And people say, well, the world is your oyster, you can do anything in America. No, it wasn’t. I didn’t know. I didn’t have that confidence. We didn’t have money. There was just — I just — I find it that a downside of a meritocracy and capitalism is that we assume anybody can be anything and if you’re not successful, you’re a loser. You screwed up because we live in a society, supposedly, where anyone could do anything.
And my dad who’s well-meaning but not what I’d call, a very worldly guy, said you don’t need college. I’m getting you a job installing shelving, which by the way, was going to be 18 bucks an hour which seemed like a lot of money to me. I could fulfill my dream of getting a Z28 or TransAm which was the only goal I had at the age of 18.
And my mom said, you need to appeal to UCLA. You have to go to college. You’re smart enough. And I — the truth has a nice ring to it. I literally said, you’re letting me in or I’m installing shelving.
And I remember the day they called me at home and this woman said, you’re a substandard student but you don’t test well. But you’re a native son of California and we’re going to let you in and I rewarded them with a 2.27 GPA from UCLA. And then they took another chance on me and let me in to grad school at Berkeley.
RITHOLTZ: How did you get in to Berkeley with mediocre grades?
RITHOLTZ: So, my only saving grace is I’m an idiot savant with standardized test.
GALLOWAY: Yes. So …
RITHOLTZ: Or as my wife would say, you’re have of that.
GALLOWAY: Yes. I’m just an idiot when it comes to test.
RITHOLTZ: Right. That’s the half.
RITHOLTZ: But so I was able to get into grad school. How did you get into Berkeley from UCLA with bad grades and bad test?
GALLOWAY: Again, generosity of a woman named Fran Hill. I have some positive attributes, so I had finagled my way into Morgan Stanley. I had offers from several investment banks. I interview well. I took a job with Morgan Stanley because I heard they didn’t check transcripts and I lied about my grades.
I heard they didn’t …
RITHOLTZ: That was a rumor that they don’t check transcripts?
GALLOWAY: Yes, well, they didn’t back then. And then …
RITHOLTZ: That’s amazing.
GALLOWAY: … and then a kid had found out, that found out a kid was accused of insider trading and never graduated from University of Illinois and they started checking …
GALLOWAY: … transcripts. Anyways, with the Missouri St. Louis benefit of an analog age is that …
GALLOWAY: … stuff like that and they also — I heard they didn’t drug test which ended up being a lie.
But anyways, went to Morgan Stanley. I was involved in a lot of activities. I was an athlete at UCLA. So, I had some positive stuff, but I remember them calling me and saying we love your application but we think there’s an error. It says that your GPA is 2.27, which keep in mind, is not easy to do.
RITHOLTZ: No. That’s a …
GALLOWAY: Because if you get less than 2.0, you’d be out (ph). Academic probation and you go subject to dismissal.
So, you got to get a bunch of these and then you got to get above at 2.0 to reset the clock for two more semesters.
GALLOWAY: So, I came perilously close. I was sleepwalking through life like a lot of 22-year-olds to not getting into — to getting kicked out of UCLA. But again, Berkeley took a chance on me. Got my act together.
I think, like you, I was a bit of a late bloomer. And it started an upward spiral. But if it hadn’t been for the generosity and vision of California taxpayers and the reasons of UC, Berkeley will graduate more kids from low-income households this year than the entire Ivy League combined. Seven of the 10 …
RITHOLTZ: That’s amazing.
GALLOWAY: Seven of the 10 universities with the greatest income diversity are all university — are University California schools. But in general, I would argue that universities in the U.S. have lost the script, see themselves as luxury brands. We need to massively increase the number of seats. We need the tax endowments that they don’t grow their seats faster than inflation.
Stanford has tripled — has tripled the number of applicants. They haven’t increased their freshman seats hardly at all. That is, in my opinion a crime. The head of head of admissions at Harvard says we could have doubled our freshman class without sacrificing any quality with a $38 billion endowment, well, Boston, why aren’t you doing that?
This has literally become we have to get to a point where we’re more like Canada where more kids have access to the greatest the greatest lubricant for upward mobility in the world and that is higher education.
RITHOLTZ: And speaking of lubricants to higher education, you’ve made a number of gifts to both Berkeley and NYU. Tell us what motivated that? Is that just gratitude and giving back?
GALLOWAY: That was an easy one for me. It was just an easy one. I got really lucky and I just want — that was just easy. It’s — if it hadn’t been for unfortunately college is a lot more expensive now and that was just an obvious nod to, again, California taxpayers and the jewel of California, the University of California.
So, that was just an overdue nod to the University of California.
RITHOLTZ: So, let’s talk about luck because it’s a really — I don’t want to call it a theme, but it’s a thread that runs through the book and it’s worth exploring a little bit. You referenced how incredibly lucky you’ve been. I’ve had numerous people sit that seat (ph), that seat where you, and they’ve all said billionaires, Nobel laureates, masters in business who all have said, but for a lucky break here or the way that the ball bounced there, I wouldn’t be here today.
GALLOWAY: Well, look, it’s easy to credit your character and you group your successes in the markets through your failures, I have not such delusions and it’s not a humble brag. It really isn’t.
And it can be tiny switches in your DNA or the way you’re born. We’ve — I think I’ve talked about this with you. My freshman roommate in the fraternity, to be born in 1964, a white heterosexual male, in the greatest …
RITHOLTZ: In the United States. Yes.
GALLOWAY: … in the United States, the greatest country in the world, and in California which is about to experience the greatest increase in value and …
RITHOLTZ: The history.
GALLOWAY: There was more value creating in a 7-mile radius of SFO from ’92 to ’99 than all of you Europe since World War II. And I just happened to be at the right place at the right time.
Luckiest person in the world, right? A white guy, heterosexual, we had advantages that other people did not have and that’s unfair, but the reality was I was all those things. And so, I got very lucky.
RITHOLTZ: There was one other question I wanted to get to before some of our favorite questions. And I have variations of our favorite questions.
All right, 2017, you mentioned that you were selling asset. You were moving to cash.
RITHOLTZ: Have you still — are you still on that position?
GALLOWAY: I was stupid. It was a reaction. I was angry about Trump’s selection. And I got advice from you, always be in the market. We can’t time the markets and also (inaudible), told me the same thing. I went back in the markets and I thank God I did. It’s been an unbelievable ride up.
I do think there are certain canaries in the coal mine, though. I think when modestly talented 25-year-olds are getting a $150,000 a year because they know how — they python when midtown or downtown real estate and bad — kind of marginal areas is getting 50 or 60 bucks a square foot, it just — I see mediocre restaurants you can’t get reservations at, there’s just …
GALLOWAY: I feel like …
RITHOLTZ: We’re late cycle. It’s …
GALLOWAY: We’re ready. We’re due, right?
RITHOLTZ: So, here’s the interesting thing coming out of a financial crisis. You tend to have a longer, more modest — this is Reinhart and Rogoff research (ph).
RITHOLTZ: You have a longer but more modest economic expansion. So, here we are, the session ended technically 2009, 2010. It’s nine years later. It’s a pretty long run.
GALLOWAY: Isn’t it the longest ever? I mean, this is kind of …
RITHOLTZ: It’s pretty — it’s pretty close to it. I mean, you could go through early periods and — post World War II periods and find it although there were a lot of small recessions, late ’50s, early ’60s.
So, we’re — the problem is it’s such an artificial period with Fed stimulus et cetera, et cetera. It’s — if it’s the longest one, it’s the longest one with an asterisk.
Although, when you look around the world, Australia want more than 25 years without a recession in the boom period of China’s growth. So, that’s kind of interesting.
GALLOWAY: Is this — isn’t all of this basically our generation has gotten really smart or I’m just on the tail of the baby boom, hasn’t our generations just perfectly game the system and figured out a way to elect officials and basically said we want the greatest transferring wealth ever occur — that ever registered in history to be from every other cohort to baby boomers?
So, basically, big tech is a vessel that transfer wealth from the entire world to the U.S. and then to the coast? And everything from Social Security, the artificially suppressing interest rates that’s drive up asset values to Social Security to mortgage tax deduction to capital gains is nothing but a giant transfer of wealth from every cohort to baby boomers.
RITHOLTZ: From the future pulled back …
RITHOLTZ: Listen …
RITHOLTZ: I would argue that your …
RITHOLTZ: … you’re technically not a baby boomer. You’re sort of in the valley between the boomers and the …
RITHOLTZ: Like, to me, the baby boomers ended in 1959. If you’re born in the ’60s …
RITHOLTZ: You’re just so — and my sister was born in ’64. I get two and a half years on you.
You don’t really feel like a baby boomer. That’s a whole different — like, I don’t relate to the boomers. I kind of look at them askance, but I also look at Gen X which is totally different than me. But I think the boomers are the worst generation and I think history will bear that out.
GALLOWAY: The greatest generation in history.
RITHOLTZ: Yes. Absolutely.
GALLOWAY: And everything, in my view, we talked about this — I went on — I go on Fox once a week because I like to go behind enemy lines and they have …
RITHOLTZ: By the way, I love watching you on that because they don’t know what the hell to do with you. You’re clearly …
GALLOWAY: … introduced me as a socialist.
RITHOLTZ: They — you just sold L2 to Gartner last year. You’ve sold — how many companies have gone public or been purchased? Three? Four?
GALLOWAY: Yes. I’m three, four, and two.
RITHOLTZ: OK. So, that’s a great track record.
GALLOWAY: Not, really.
RITHOLTZ: You’re — listen, you don’t …
GALLOWAY: If that’s what’s great about America, it’s guys like me can survive. I’d be in some sort of prison if I …
RITHOLTZ: No. If you’re a venture capitalist, you’re going to make a 100 investments. You’re you looking for the one home run. Three, four, and two is a great track record for — stop and think about how many startups fail?
GALLOWAY: … of success is really resilient — resilience over …
RITHOLTZ: There’s a lot to it. You keep mentioning grit (ph).
RITHOLTZ: But they don’t know how to deal with you because you’re — you are a capitalist but you talk about empathy and about helping others and about things beyond mere money and they’re perplexed by it.
GALLOWAY: Well, it’s — so, they had this — it was hilarious. They have the socialism versus capitalism when you go on Fox and guess what? Capitalism won, right?
RITHOLTZ: Go figure.
GALLOWAY: And so, they invited me on. And for some reason, they also introduced me as a socialist and I like those guys. I like Stuart Varney and Neil Cavuto. I think they’re really …
RITHOLTZ: Cavuto is great. I know Cavuto …
GALLOWAY: Really intelligent, interesting guys.
GALLOWAY: And they’re generous to me and they’re nice to me. I really like the people over there despite being and sort of a the spinning of hate on a regular basis.
RITHOLTZ: Other than the hate-based business model, they’re fantastic.
GALLOWAY: But I’m writing it and I’m going to need your help on this. I’m writing an article for the economist or I’m claiming to be writing an article. And they — on capitalism. And socialism is nothing but, OK, the means of production controlled by the state and divvied up by and the spoils divvied up, tariffs are socialists.
RITHOLTZ: Of course.
GALLOWAY: Artificially suppressing interest rates are socialists …
GALLOWAY: Telling an air-conditioning company to locate in Michigan is socialist. Child labor laws are socialist. Capital gains, tax cuts, socialist.
So, you, me and the president walking to a bar, two of us are capitalist, the president is a socialist. And I — this is …
RITHOLTZ: How about the is the entire reimbursing farmers who supported him against Chinese tariffs? How is that — anything but social?
GALLOWAY: I mean, we’re really going off script now. But you look at the — I initially thought, OK, I’m a fan of actually going after China for unfair trade. I believe that we have this unbelievable ecosystem where the greatest universities in the world trained some incredible human talent and then counter with incredible financial system. We create innovation that’s just unparalleled.
The Chinese then steal it and then sell it back to us for 30 cents and a dollar. So, I am all for trade war. But here’s the problem. One, we could have done it with partners. And two, the Chinese think in 20 and 30-year increments, they’re willing to shut down town and say, sorry, you need to relocate where the tariffs are bad. We don’t care. Relocate. It is what it is.
A farmer goes out of business and MSNBC is out there and the president is trying to bail them out. We just don’t have — it’s like if I go into war with Russia, you can have better tanks, you can have better officers, their willingness to endure suffering is just going — it’s just going to end badly for whoever invades them and I think the same is true this trade war, unfortunately.
RITHOLTZ: So, normally, around now, I would go to my favorite questions. But you’ve done them so many times, I had to come up with some …
GALLOWAY: New ones?
RITHOLTZ: Variations of them.
RITHOLTZ: So, let’s …
RITHOLTZ: … speed around this.
RITHOLTZ: All right. So, normally, around now, I ask what would be the first car you own, but I’m going to ask what’s the next car you’re going to buy?
GALLOWAY: You’re a car guy …
RITHOLTZ: I am.
GALLOWAY: So, I’m in the midst of a midlife crisis that I think I’m going to grow out of in about 30 or 40 years.
GALLOWAY: So …
RITHOLTZ: Just buy the car. It’s cheaper …
GALLOWAY: I got. OK. That’s right. So, I have a GL 550. I have a truck right now, Mercedes.
RITHOLTZ: I can’t stand that truck.
GALLOWAY: It’s an amazing car.
RITHOLTZ: I can’t believe you have that.
GALLOWAY: It’s an amazing car.
RITHOLTZ: I look like …
RITHOLTZ: … ugliest thing …
GALLOWAY: I roll up bit (ph), baby. I look so German and so interesting in that car.
RITHOLTZ: Most of my cars are …
RITHOLTZ: They — they just redesigned it and when you look at it, you can’t — unless they’re side-by-side, you can’t even tell.
GALLOWAY: It’s a fantastic car.
GALLOWAY: I have the Model X, the Tesla.
GALLOWAY: I don’t like electric. I like — I just don’t like the feel of it. I like an internal combustion engine. It’s a great car. I don’t enjoy it. I don’t like it.
RITHOLTZ: By the way, go in YouTube, watch the videos of the Model X blowing away Ferraris and Lamborghini.
GALLOWAY: No, it is a superior car. But Elon Musk called a cave driver trying to save young people’s lives a pedophile …
GALLOWAY: … and I went on CNBC the next day and I announced that I was selling it. So, I have to sell the thing.
GALLOWAY: And by the way, the depreciation on those bad boys …
GALLOWAY: So, I said, OK, I got to get another car. And you merely weighed in and said and I’m thinking I want to get a Range Rover because I’m all about signaling my worth as a man and as a mate (ph), so I need to find some ridiculously overpriced car …
RITHOLTZ: But you have the G wagon. So, I would picture you in the …
GALLOWAY: The GL550, not the G wagon.
RITHOLTZ: I thought …
GALLOWAY: That’s a stupid car.
RITHOLTZ: That’s what I thought you’re talking about.
GALLOWAY: Ride’s terribly …
RITHOLTZ: So, you have the long …
GALLOWAY: I have the truck, GL550.
RITHOLTZ: I immediately assumed you went G wagon …
GALLOWAY: No, no, no.
GALLOWAY: I’m insecure but I’m not pathetic.
RITHOLTZ: That’s what I was …
RITHOLTZ: I missed the …
GALLOWAY: That’s why I — that’s literally, like, OK …
RITHOLTZ: It’s a German military vehicle.
GALLOWAY: I need to find a way to spend more money than owning a Hummer.
RITHOLTZ: That’s right.
GALLOWAY: I own a Hummer …
RITHOLTZ: Get the AMG version of it, it’s like $220,000 .
GALLOWAY: Totally ridiculous car.
RITHOLTZ: So, the GL …
GALLOWAY: All right. So, I’m going to ask you a question. You know me pretty well, what’s my next car? Pick it. Pick it. What’s my next car?
RITHOLTZ: So, you’re a dual city.
GALLOWAY: Yes. New York and Florida.
RITHOLTZ: To me, I don’t see how you don’t have a 911 convertible …
GALLOWAY: Dude, I can’t fit on a Porsche. I’m six-foot-three.
RITHOLTZ: Of course, you can. I have buddies who are 6’6″ who …
RITHOLTZ: By the way, I am not a Porsche guy.
GALLOWAY: OK. Here’s the problem.
GALLOWAY: Here’s the problem. First, I do not fit in a Porsche, I’d have an elbow out at each window.
GALLOWAY: That is a ridiculous car. It’s a beautiful car …
RITHOLTZ: I don’t think it’s beautiful …
GALLOWAY: I’m not a sports car guy.
RITHOLTZ: It’s just a very fast and good handling …
RITHOLTZ: You want a pretty car, go buy a Bentley, go buy a …
RITHOLTZ: All right. So, then …
GALLOWAY: What is the big guy (ph) rolling? Come on?
RITHOLTZ: So, I have an M6 convertible and …
GALLOWAY: M6 convertible?
RITHOLTZ: Now, let me just explain.
GALLOWAY: That is ridiculous.
RITHOLTZ: Let me just explain …
RITHOLTZ: I’m also a cheap SOB. So, I won’t go out and or got and spend a hundred …
RITHOLTZ: I don’t have kids. I have a house, I have five cars, and a boat. But hold that aside, I bought this car off of lease from Indianapolis …
GALLOWAY: Right. Right.
RITHOLTZ: … for a esteemed condition …
GALLOWAY: Yes, yes, yes.
… and I paid less …
GALLOWAY: You were the guy that used to surf through the Recycler when you’re a teenager?
GALLOWAY: No. No.
RITHOLTZ: Well, to look at cars, sure.
GALLOWAY: What car do I buy, Barry? Sell a car, Masters in Business. What car do I get?
RITHOLTZ: See, I …
GALLOWAY: Frustrated professor, angry …
RITHOLTZ: Range Rover HSE Sport is …
GALLOWAY: That’s what I should do …
RITHOLTZ: Now, understand, Ranger Rover is wildly overpriced.
GALLOWAY: Totally. Yes.
RITHOLTZ: Right? They lease out terribly. They purchase terribly. They’re not known for their mechanical …
GALLOWAY: Range Rover HSE?
RITHOLTZ: But if you want a signal, that’s your signal.
GALLOWAY: That’s right.
RITHOLTZ: I think that’s the way to go.
RITHOLTZ: Even though I can give you a million reasons why no one should buy that car. But the signaling, to show your worthiness to take care of …
GALLOWAY: Barry, you get me. You get me.
RITHOLTZ: I totally do. Even though you should be in some cute little sportscar, I don’t see you in a Bentley or anything.
GALLOWAY: That’s not me. That’s not me.
RITHOLTZ: So, in the book, I discovered a fascinating thing about one of your mentors.
RITHOLTZ: Your mentor thought the exact same class in marketing and branding that you teach?
GALLOWAY: Yes. My class is based on David Aaker’s course, Father in Modern Branding. Didn’t know what I wanted to do, as we referenced before. Business school is mostly for the elite and the aimless. It’s for people who want out of the profession they’re in.
I didn’t know what I wanted to do, I just knew I didn’t want to go back to invest banking, took the second year class of David Aaker. He talked about the importance of yellow and how intangible has created more shareholder value than any other — any other system or construct in history.
He really kind of identified and encapsulated the brand era. And I thought this is what I want to do with my life. And I went to him and said I’m starting a consulting firm based on your principles called Prophet, I’d like you to join. He said, no way, I’m not interested in working with you. You’re a second-year student.
But long story short …
RITHOLTZ: And Prophet ultimately was sold, wasn’t it?
GALLOWAY: Yes. We grew it to 400 people. It’s still around today. I think it’s about 500 people now. Sold it to Dan Suh (ph). Tremendously rewarding. And ultimately David did join as vice chairman.
But you what you want when you go to school, you want to find someone who inspires you and sets you off on a career that is rewarding personally and economically and I got that from David Aaker.
RITHOLTZ: So, around now, I ask the book questions, tell me about your favorite books, but we’ve done that already.
GALLOWAY: Done that. Yes.
RITHOLTZ: So, I’m going to ask you a different book.
RITHOLTZ: Different book question, tell me about a book that changed the direction of your life?
GALLOWAY: It’s weird. He just died, actually. I read my first kind of real novel when I was in high school and it’s not that dramatic. I read a book by Herman Wook called the “Winds of War.”
GALLOWAY: And just learning about …
RITHOLTZ: Big, thick book, wasn’t it?
GALLOWAY: Yes, big, thick book. And just learning about World War II and the what was probably the kind of the defining conflict of our century and what different groups went and the learning about the Holocaust, it just sort of got me thinking about things I had never thought about and sort of changed, got me interested in history, got me interested in war history. So, that, for me, was sort of my kind of first adult book, if you will.
RITHOLTZ: So, you are an open book and you reveal yourself warts and all.
GALLOWAY: I’m an open book, Barry.
RITHOLTZ: But tell us something we don’t know about Scott Galloway?
RITHOLTZ: Is there anything we don’t know about Scott Galloway?
GALLOWAY: Yes. I’m a — just laying it all out there. I was the Bruin Bear mascot in my sophomore year at UCLA.
GALLOWAY: I won most comical in junior high school.
RITHOLTZ: In junior high school?
GALLOWAY: Yes. Junior high school, most comical.
RITHOLTZ: I didn’t know they voted for that sort of stuff.
GALLOWAY: There you go.
RITHOLTZ: All right.
GALLOWAY: And Steve Martin, that’s I’m aging myself. I got Steve Martin.
RITHOLTZ: Wait, wait, wait.
GALLOWAY: And since then, I haven’t had a single award.
RITHOLTZ: Wait. Steve Martin?
GALLOWAY: You know they did — do you remember in high school, in junior high school, they would do, like, yes, and just give you with the age over at high school, I got Steve Martin. That was like my thing in the high school poll.
RITHOLTZ: So, most likely to be like Steve Martin?
RITHOLTZ: Not you went to school with Steve Martin?
GALLOWAY: No, no, no, no.
RITHOLTZ: Who I think is …
RITHOLTZ: So, tell us what you do for fun outside of class, outside of occasionally holding on to a fiberglass …
GALLOWAY: Pretty boring. Not that interesting. Time with kids. A lot of Netflix.
RITHOLTZ: What are you watching on Netflix?
GALLOWAY: My new favorite is — and I’m like everyone else, I’m obsessed with “Game of Thrones.” I think “Veep” is the best written show on TV …
RITHOLTZ: “Veep” is hilarious.
GALLOWAY: The new show that I love is “Fleabag” which you may or may not have heard of.
RITHOLTZ: The person who wrote “Fleabag” wrote something else.
RITHOLTZ: I’m trying to remember what it was. I haven’t started “Fleabag.”
GALLOWAY: It’s outstanding. And also “Killing Eve” is really wonderful.
GALLOWAY: Yes. So, every Thursday night, I do the same thing. I commute between here and Florida. I go home. I take a run. I come back. I put my kids to bed. I vape with my wife. I’m finally confident enough to say that. And then we watch television.
So, I think the key — I think the defining art form of this age is television.
RITHOLTZ: No, we are in the golden age of television.
GALLOWAY: A 100 percent.
RITHOLTZ: I’m going to give you three recommendations.
GALLOWAY: Go for it.
RITHOLTZ: One of them I don’t know if you’re going to like. Do you like sci-fi at all?
GALLOWAY: Lay it on me, Barry.
RITHOLTZ: “The Expanse.”
GALLOWAY: Where is that?
RITHOLTZ: So, the “The Expanse.”…
GALLOWAY: There’s TV I don’t know about?
RITHOLTZ: It’s either Netflix or …
GALLOWAY: What a wonderful world we live in.
RITHOLTZ: … or Amazon. So, “The Expanse” takes place in the not-too-distant future. You have three political powers. You have earth, you have Mars, and then you have the Belts, out where the miners are out, pulling stuff off.
Anyway, fascinating science fiction, really kind interest …
GALLOWAY: You watch “The Terror”?
RITHOLTZ: I don’t.
GALLOWAY: You got — if you want …
RITHOLTZ: I want “Black Mirror” and …
GALLOWAY: Ridley Scott.
RITHOLTZ: I love Ridley Scott.
GALLOWAY: “The Terror,” one of the best …
RITHOLTZ: “Black Mirror” and “Electric Dreams” is another …
GALLOWAY: Yes. OK. So, all right.
RITHOLTZ: But the two comedies …
RITHOLTZ: … I want to share with you. Have you started seeing on Netflix “I’m Sorry”?
>I haven’t. I that great?
RITHOLTZ: It’s so — picture — if I had to sum it up in 30 seconds, female comedy writer, married, with a little girl. Picture of female version of “Curb your Enthusiasm.” Not as nasty, but more of a sitcom funny. Very, very good.
And the new one I just started — the new one I just started watching, with Christina Applegate, “Dead to Me.”
GALLOWAY: That’s good.
RITHOLTZ: That really, really is good.
GALLOWAY: So, along those lines, watch Ricky Gervais’ new series.
RITHOLTZ: Already went through. Fantastic. “That’s Life,” something like that.
GALLOWAY: Really strong.
RITHOLTZ: All right. Our last two questions …
RITHOLTZ: And the problem I can ask you, the advice you’d give a millennial because your old book is advice to millennials. What advice do you wish you got when you got out of college that nobody told you?
GALLOWAY: It’s kind of — everything’s going be OK. I was insecure …
GALLOWAY: Yes. But in the book, they’ve surveyed seniors on what piece of advice they would give themselves to their younger selves and consistently it comes back and it’s sort of the same advice, they wish — their one wish and their advise to themselves is they wish they’d been less hard on themselves.
RITHOLTZ: Go easy on yourself.
GALLOWAY: And that is, look, life’s — you’re going to screw up. Bring forgiveness. And one of the keys of long-term relationships is forgiveness. It’s difficult to maintain a long-term relationship unless you assume the other person is going to occasionally screw up and you need to bring forgiveness to the relationship and you also need to bring that to yourself and be a little (ph) — because in the moment, it seems like a big deal, but if you — again, the one piece of advice seniors would give themselves, they wish they hadn’t been so hard on themselves.
So, it’s going to be — it’s going to be OK.
RITHOLTZ: Quite fascinating. Scott Galloway, this has been absolutely delightful.
GALLOWAY: And you sold the Range Rover.
RITHOLTZ: And I sold the Range — right, and HSE. Be sure to get with the upgraded package that stops and does the lane avoidance warning (ph). And I’m not a fan of that car, but that’s got your name written all over it.
GALLOWAY: You know it, dawg.
RITHOLTZ: We have been speaking with NYU Stern School of Business professor, Scott Galloway, author of “The Algebra of Happiness.”
If you enjoyed this conversation, well, look up an inch or down an inch on Apple iTunes, Overcast, Stitch, Spotify, wherever finer podcasts are sold and you can see any of the previous 250 or so conversations we’ve had over the past five years.
We’d love your comments, feedback, and suggestions. Write to us at at MIB [email protected] Be sure and hit the like button that you might see on whatever site you’re on, give us a review. I would be remiss if I did not think the crack crew that helps put this podcast together each week. Madena Parwana is my test master/producer. Michael Boyle is our booker, Michael Batnick is our head of research, Atika Valbrun is our project director.
I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.