Support for this show comes from atlasian. Productivity. It's a word we tend to obsess over. Am I being productive enough? Is my team being productive enough? But how do we even measure productivity when our team might be distributed across the globe? With 11,000 plus employees around the world, atlasian knows a thing or two about distributed work. No matter if you're a team of two or two million, or if you're around the corner or around another continent, atlasian software like Jira, Confluence, and Loom keep everyone connected and moving together. As one towards shared goals. Learn how to unleash the potential of your team at atlassian. Com. That's atlassian. Com. Atlassian. This week's number, 22 Million. That's how many high school and college paper students turned in last year that used generative AI. I used to complain to my mother that the students were making fun of me for being a virgin. Her advice? Stop giving them bad grades. Welcome to Prop G Markets, Ed. Today, we're discussing growth at ByteDance trading on event outcomes and a big investment in the creator economy. By the way, Ed was nominated, got an honorable mention for best co-host Host.

That's right. Which at the age of 15, it's pretty recent birthday. At the age of 15, it's pretty exciting. So congratulations, Ed.

Thank you. I think it was for both of us.

I got more awards than prostateitis. I don't need this shit. I love the affirmation, but I was more excited, as you can tell.

Well, I'm just trying to signal that I'm humble.

Have you dropped that line in bars yet? I've been nominated for an Honorable Mentor for Best Co-Host in the Webby Award.

That I was a 2024 Webby honoree. No, I need to try at some time. It's probably going to be really successful.

That's an express train to virginity.

How was your vacation?

It was good. Thanks for asking. Egypt was just one of those trips where I enjoy it more after. And that is, I know just at some point in our lives, we're going to be really... We're just going to love looking at those pictures and remembering how we were floating down the Nile and all that good stuff. So that was a good family trip. And then I did a trip to Israel on my own. That was much heavier as you can imagine, but more meaningful. Tel Aviv is an amazing city. I would describe Tel Aviv as Berlin, but good weather on the beach. It's a very cool city. So I really enjoyed Tel Aviv, the food, the people. And then I went to the Gaza envelope and toured Kibbutz Faraza, which is one of the 22 kibbutz that was attacked on October the seventh. Obviously, that was very deep and heavy, but I'm glad I went. But yeah, glad to be home. And I head to Vancouver on Tuesday, where I meet Greg Shove, the CEO of Section, and Prof. G analyst Mia Silverio at TED. I'm doing a talk called The War on the Young, which I'm excited about.

Then I go to New York for the launch of the book. Be a lot of book promotion, a lot of book parties. I don't know if those things work, but it'll be fun. Although we're number one, someone said we're number one in new releases in wealth management. I don't know what that means. Please buy our book. If you buy our book and post it on social, this It's not a joke. We'll donate 50 bucks to Charity Water, which I love bringing potable water to sub-Center in Africa. But please buy our book because I got to figure out a way to get Ed up to $9.25 an hour. All right, get to the headlines, Ed.

Let's start with our weekly review of market vitals. The S&P 500 declined, the dollar rose, Bitcoin dropped, and the yield on 10-year treasuries jumped. Shifting According to the headlines. The consumer price index showed inflation rose 3.5% in March from a year earlier. That's slightly stronger than expected and higher than last month. The lingering pressure of inflation has derailed hopes of a rate cut in June, and investors are now expecting the first cut in the late summer or early fall. Gold hit a record high, up more than 16% year over year. Central banks are driving the surge as they strengthen their reserves, and China just purchased gold for the 17th month in a row to reduce its dependence on the US dollar. Apple doubled its iPhone production in India last year, assembling $14 billion worth of the product in the country. One in seven iPhones are now made in India, though China does remain the largest manufacturer. Nelson Peltz lost his bid for a board seating his proxy battle at Disney after receiving only 31% of the vote. Shareholders voted to reelect the full board, also rejecting Peltz's other nominee, Jay Rasulo, who received only 12% of the vote.

Finally, the Justice Department is investigating whether AI companies could be violating antitrust laws. The DOJ is specifically looking into competitors sharing board members, a practice that the Biden administration is increasingly cracking down on. Scott, your thoughts?

In order, consumer price index. I got this wrong. I thought inflation was going to crash in 2024, and it's stickier than people think, which is interesting, although the markets don't seem to mind it so far. The thing about gold, I've never understood gold. I in a high interest rate environment, although this isn't arguably a high interest rate, it's just what you would call historically a normal interest rate environment, gold surge is somewhat befuddling to me. I guess it's a hedge against inflation. It does have some use cases. I wonder if it plays into an increasing conspiracy economy, and that is because of an attention economy where you get to monetize attention and novelty/conspiracy/dis and misinformation, there's just more economic value in it. That gold plays into that. That if you're worried about the zombie Apocalypse or the dollar losing all value, according to every Bitcoin bull, that you think, Oh, a safe hedge would be gold. It feels very survivalist to me, but the news says that it's central banks investing in gold, I guess, because they want to get out of fiat. Any thoughts on the CPI or gold?

Yeah, I'm with you on gold. I feel like people have been predicting the end of the dollar for years, at least four decades. And that's always been It's part of the narrative with gold of why we need to buy gold. But that's just never come even close to happening. I mean, you look at the dollar today, the US dollar accounts for more than 60 % of all global currency reserves. And then the next best option is the Euro, which is at 20 %. So it's not even close. And now a lot of people will say, Well, the dollar is declining. It's on a downward trajectory, which if you look at the past 10 or so years, that's true. But if you zoom out to a reasonable time frame, if you look back to the '90s, it's actually increasing in usage. In 1990, the dollar made up less than 50% of global reserves. I think this obsession with gold and with crypto, by the way, is largely being driven by this narrative that's very fun to indulge in. It's exciting to think about what the world would look like if it collapsed and how the US is going to fall and how we're all going to be living in bunkers and bartering with gold coins.

But there's There's just no plausible data that actually supports that narrative.

Yeah, it's weird, though. So you know what my favorite thing in the world is my favorite physical object?

I was going to say your dog.

Well, that's not a physical thing. That's an animated thing. Yes, those are my favorite things. They just beat out my sons. But my favorite inanimate things are one. My favorite object is I have a Ramona piece of luggage that I absolutely love. But more than anything, I just fucking love money. And what do I mean by that? I love hard cash, and I love rolling around with Benjamins, and I love paying with cash. I love the way it feels. I love the way it looks. I think a lot of it is deep-rooted scarring. When I was in college, I remember going into the bank, not the ATM, because the ATM only issued $20 bills, and I needed $10, and I had $38 in my checking account. So now it's just such a luxury to roll around like a mobster with just a big wad of cash. I just absolutely love fiat currencies. The tweet that's got the most retweets of any tweet I ever or any, whatever we call it, Twitter, Twitter X, was when I said, I'm doubling down on the ultimate, the most innovative payment platform in history, USD. I love Karen Cash.

Probably isn't going to be mugged in the next day. Some gang with AI is going to be like, This is the idiot we want to take down. Apple arguably has the best supply chain in the world, number one consumer products company in the world. And Tim Cook comes out of supply chain. Their ability to pull together $500 worth of sensors and chipsets and sell it for $11 to $1,300 is unprecedented. The iPhone creates more profits than any company in history. It's the margins of Ferrari with the production volume in Toyota, and it's a supply chain story. You would argue even verticalization down into their stores. What's happened over the last few years since COVID is up until COVID, the entire supply chain strategy was optimized for efficiency, which is Latin for cost. But what you've had since COVID was we realized there was absolutely no slack in the supply chain. It had been so optimized that if the cheapest place to produce tops for a specialty retailer was in Shenzhen, 90% of our tops were coming there. Then if a virus jumps the lab and they shut down this region overnight or within two weeks, your 550 specialty retailers don't have tops, and there's no way to replicate that or replace that production quickly.

You got to think that Apple scared shitless about their dependence on their supply chain in China and the geopolitical risks that present. So this is an example of them scrambling to diversify as quickly as possible. I would bet they would literally veto anything that is an incremental dollar going into China on the back-end, not on the front-end. You want to spend more marketing on the Chinese consumers such that they maintain that desire and demand for our products? Fine. But anything around the back-end, the rest of corporate America has woken up and said that homogeneity of our supply chain is a risk, and we saw how damaging that can be during COVID. Nelson Pelt is sick of talking about it. This was our prediction that if it goes to a board meeting, if it goes to an annual meeting, it means the incumbents are going to win. I don't think Nelson is ever going to go on the board because I think the stock is going to go up. The great thing about being an activist is that if the stock doesn't go up, you get on the board and you can show what a big swing and dick you are and show up and be disruptive or you win, so to speak.

You win board seats. But how you really win is you lose because the stock keeps going up, and then you sell your position, you make a shit ton of money, and your investors want to put more money, and you get to hang out in Florida where Nelson hangs out. My prediction, moving forward, is that Nelson is never going to get a board seat because the stock is going to continue to go up. Investors don't kick out incumbent board members as long as the stock is going up. Then the Justice Department investigating whether AI companies could be violating any trust laws around shared board members. I I think that's really interesting. You pointed this out that AI is more consolidated than we think. What you've seen around this open AI jiu-jitsu move where Microsoft effectively controls it but never really acquired it, thereby not triggering an antitrust review by the FTC or the DOJ, that all of these investment deals, and you pointed out that Microsoft is in three of the five biggest ones or something, is a really elegant, covert, stealth way of avoiding any trust scrutiny. Shared board members is really interesting because the problem is you want to make sure that companies aren't coordinating with each other, that it's saying, Steve Jobs, I guess Eric Schmidt, I think Eric Schmidt used to be on Apple's board?

That's right.

He stepped down, 2009. Yeah.

Once Google decided they were in the handset business or the Android business, Steve Jobs I was like, I don't need Eric Schmidt knowing what our plans are. But if they're coordinating, if they both have similar investors, that's bad for competition because effectively it goes from five companies to two or three because they wink at each other and go, Okay, we're going to take this part of AI, you take that part of AI. What are your thoughts on it?

What's very interesting now is that this is a law that it's technically called interlocking direct rates. It's a law that's been around for 100 years. It's barely been enforced until about two years ago when the Biden administration started cracking down on it. And since then, we've seen around 25 public companies whose directors have stepped down from the board. Now, they're also targeting boards that have indirect relationships with each other. So just As an example, there's this software company called SolarWinds Corp. Three directors had to step down, not because they served on the board of a direct competitor, but because they were affiliated with a private equity firm that was invested in a direct competitor. The private equity The firm was Thoma Bravo. They were invested in Dynatrace. In other words, the Biden administration set a precedent, which is you can't advise a company and at the same time advise a firm that has a financial interest in that company. This is everywhere in AI. Right off the bat, I can name you three illegal board positions in AI right now.

Name them, you high IQ bitch nominated for best co-host. Name them. I'm calling your bluff. Name them.

Microsoft. Microsoft is on the board of OpenAI. It's They say it's a non-voting board seat, but that's still a board seat. Microsoft is also an investor in Mistral and inflection, which are both AI companies that directly compete with OpenAI. That's one right there. Another one is Reid Hoffman. Reid Hoffmann is on the board of Microsoft. He's also a co founder of inflection. Brett Taylor, he's a chairman of the board of OpenAI. He's also on the board of Salesforce, which is an investor in Anthropicic and mistral. All I can think is what's going to happen when the DOJ launches a full fledged investigation into this thing, because I would bet that no AI company is safe. This hasn't gotten that much media attention, but I'm with you. I think this is probably the most important headline in this episode because this affects everyone in big tech.

Occasionally, you stumble upon insight, and this is a big stumble for you. You're absolutely right. I mean, and that is really insightful. And you articulate much better than I could, because all the companies you mentioned should be going at it, going at full body contact violence towards each other, trying to come up with ways to give the New York Times more money such that they can crawl the New York Times and no one else can. But by virtue of the fact they're down with sharing board members, that means they're coordinating. That means that they're cooperating, coordinating and cooperating with each other, which is exactly anticompetitive. When you talk about a concentration in wealth, and when you talk about an industry that is now worth more than almost any other industry other than maybe software, there's trouble in Mudville. There's This is total bullshit. I love the framing you put it through, and it absolutely should be an early and often hardcore investigation by the DOJ and the FTC. The idea that this technology, this powerful, is coming out of the gate so concentrated with a lack of competition is frightening.

We'll be right back after the break for the look at ByteDance.

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We're back with Profit Markets. Bytedance grew its profit 60% year over year in 2023, registering $40 billion in EBITDA. The TikTok owner also increased revenue 50% to $120 billion. Now, we should note these are internal figures, and they aren't independently audited. But if they're accurate, then ByteDance has surpassed its rival Tencent in both profit and revenue for the first time ever. It's also catching up to Metta, which brought in nearly $135 billion in revenue last year. So Scott, ByteDance is killing it in the face of its greatest existential threat thus far, which is a potential TikTok ban or sale in the US. What do you make of these results?

What's really interesting here is that arguably, I would argue, ByteDance is the most undervalued company in the world right now. So EBITDA of $40 billion. And my understanding is, although there are some restrictions around who can sell stock, the board has to approve a stock sale. But my understanding is in the secondary market, the company is being valued at $250 billion. In other words, the company offered to buy back shares from employees at $250 billion. So that's the mark. With EBITDA of $40 billion, that means that the enterprise value to EBITDA on ByteDance right now is six times now, versus Tencent, which is twelve times, which isn't growing nearly as fast. Alphabet, amazing company, 20 times, and Meta is 22 times. So the cloud cover, the The liquidity of the stock in the cloud of the geopolitical tensions between the US and China make ByteDance, I would argue, the most undervalued company in the world right now. Why? Well, Scott, what if it gets banned in the US? No, it's not going to get banned. It's going to be divested. There's too much My general go-to around any dispute in business is simple. Money wins.

Look where the most money would end up in people's pockets. And whatever that course of action is will be the course of action that that company, not their concern for teens, not whether they spend or don't spend. Just say, Okay, where is the money? Money wins. And the amount of money these guys are going to make once this cloud cover is removed and they can hold on to the market by divesting it or coming to some accommodation, which they could with the White House, is going to send the value of these shares skyrocketing. But six times... I mean, you're talking about, I think Ford and General Motors, does these sleepy industries trade at this multiple Just on the secondary markets, it is a little confusing because according to employees, they've been restricted from selling their shares.

And there was this whole FT article about this that we were discussing. At the same time, I've also seen articles that investors They have been selling on the secondary markets. Granted, they're struggling because there are so few willing buyers right now, but it appears that some have sold. And in addition, I went on some of these secondary market platforms like Equity Zen and Forge Global. And indeed, ByteDance is listed as a tradable company there. So it's not totally clear, but it appears that in some situations you can sell on the secondary markets, but there are some restrictions on employees. Given all that and considering the multiples that you just referenced, 6 versus 22 for Metta, say some secondary markets broker approached you with an offer to buy the shares at the previous valuation, which was $268 billion. Would you consider it?

In a heartbeat, yeah. I mean, my biggest wins have been running into the fire, buying companies with big addressable markets that for whatever reason bad cap structure or some cyclical trend, or in this case, a geopolitical overhang, have really impacted the stock because, A, it's a global company. I think it's worth more than $250 million even without the US market. And then right now, you get to buy TikTok at six times I think this is an unbelievable opportunity. I would have to go through the mental anguish of pretending I give a flying fuck about politics and- That's the problem. Morality and And then at the end of the day, I mean, I could not get over, and we're on record, what a screaming buy meta was in late 2022. And we said it over and over. Stock pick of the year, it was trading at six times. Osvatt and Motterey, it's just like it's sitting on a cash volcano. And I didn't buy it because I've been shamed on social for, okay, you constantly shitpost this company, you're not going to buy it. My advice to people is, look, to young people, especially, I get it.

If you want to take a stand, good for you. But your first obligation is to develop economic security for you and your family in a capitalist society. So vote for people that regulate these companies, but do what you need to do to get economic security. In other words, Daddy Everybody's going to load up on to take in the talk.

I can't wait to get all of the shit next week.

Would you buy it? Oh, yeah. Yeah. That's because you're a closet Republican. A total closet Republican.

Wall Street is beginning to take interest in an untraditional asset class, event contracts. What is an event contract? Well, essentially it allows you to bet on the outcome of anything. For example, the chance of a rate cut by June, or whether Congress will force the sale of TikTok, or what the highest temperature in Miami will be today, or how many Oscars June Part 2 will win. The most popular destination for these kinds of transactions is a platform called Calshi. Calshi was the first company to receive regulatory approval on event contracts, and it recently inked a deal with Susqoona, one of the biggest market makers in the world. Susqoona is now setting up a trading desk for Calshi's event contracts, which will strengthen liquidity in this new market. Scott, you're in the business of making predictions, but how do you feel about betting on them?

First off, I think they should be allowed to I don't like to infantilize people. People want to bet on stuff. Eighty-five % of the people that do this are going to be fine and enjoy it. This is not investing. Investing is an opportunity to buy a company and everybody wins. It's not a zero-sum game. If the population keeps growing and technology and innovation bring productivity up, the entire global economy should grow, meaning that the value of an asset that you have ownership taken via a share of stock goes up, and there's no loser there. This is your betting against a counter party, and someone wins and someone loses. This is gambling, and the house takes a small cut. This is gambling. This is speculation. People have the right to gamble. I like to gamble. I enjoy it. I see this consumption. I expect to lose everything I go down to the casino floor with. What I hate about this economy is that our instincts haven't caught up to the frictionless access to gambling of a smartphone. And that is when you have Kevin Hart and Charles Barkley telling you that this is fun and you're smart and you have insight into the Kansas City Chiefs.

I worry that young men who are bored, looking for a dope ahead, who don't have a lot of economic prospects, don't have the guardrails of friendships or a romantic partner, just start gambling a lot. And this is another opportunity to gamble. I don't like it. I don't know what you do about it. I think you just have to educate young men and young people on their brains and why we are risk-aggressive and that 15% of people who are men who gamble, it becomes a problem for it. It has the highest suicide rate, all that good stuff. But I guess the good news is it's not like riding options. You can't lose more than you bet. They say it hedges your risk. That's bullshit. This is pure This is pure Robin hood pretending to be in investing, and it's just gambling. I think it's innovative and interesting. I think it'll probably do well, but I don't know. What should we bet on here? Not that I'm above betting. What should we bet on?

I don't think we should bet on any of this, to be honest. I'm certainly not going to. Are you putting the money up?

Sure. I'll put up some hard cash. What is it? Okay, what are the things we could bet on here? Will the child tax credit be passed before election day? Cost for YES, 73 cents. Cost for no, 31 cents. I guess that means you get a dollar back if you spend 73 cents. Oh, so their market believes the child tax credit will be paid. It's interesting from a data perspective because the wisdom of crowds is pretty interesting. We'll chat Can a GPT-5 be revealed this year? 82 cents to get a dollar. In other words, yes. The market thinks there's a four and five chance. 19 cents, no. Tesla Robotaxi revealed on time. 61 cents for yes, 44 cents for no. That's the one I would take. I would go no on that because I think the jazz hands of Elon Musk are the size of a tyrannisaurus's rexis. Although a tyrannisaurus's rex has small hands.

Small, tiny hands.

Itty-bitty tyrannisaurus's rex A deadpool 3 Rotten Tomato score above 84. I love Ryan Reynolds. Do you know people think I look like Ryan Reynolds, but they say- I did know that, yeah.

You've mentioned it maybe 10 times, I want to say.

After the fire. That's my favorite part. After he is mained. I look like post-fire Ryan Reynolds. We'll make a bet. We should make a bet. We'll bet that deadpool 3 Rotten Tomatoes is above 84. So we have to spend 60 cents to get a buck back. And I'm going to say that the Robotech taxi, the Tesla Robo taxi, will not be revealed on time, although we should look into that. Anyways, we need Mia Silverio. She's our Chief Investment Officer. What do you think?

Well, I think the point that you make about the wisdom of crowds is an important one. And I think that's the argument that you'd have in favor of having something like this, because for the longest time, the CFTC said no to these types of event contract markets because their argument, as you said, is this is gambling, it's gaming, there's no economic benefit here. But yeah, I think that there's this informational benefit that we get from leveraging the wisdom of crowds, which is if you have a large liquid market where there's money on the line, it can be a great tool for drawing out knowledge from different groups and then, hopefully, arriving at the most rational answer and the most rational price. I think there's an argument here that this could actually be good for us. It could make us smarter, it could help us make better decisions, we'd be more informed, it could to a more efficient market. I understand I'm doing Kalshi's bidding here, but I'm wondering what your response would be to that.

Here's the bottom line, Ed. The way to make a shit ton of money is to tap into a flaw in instincts in an area that is underregulated. Americans spent a record $120 billion on sports betting in 2023. That's up 28 % from 2022. This translates into $11 billion in revenue in 2023, our net revenue. That's up 45 % year on year. In some, gaming, other than AI, gaming is growing faster than any business in the world.

Gambling, you mean?

Yeah, gaming, gambling. There you go. And because men are supposed to be more risk-aggressive, in terms of trying to find hunting and mating opportunities, you end up with this soft tissue in the species. Then because we have the walking dead in DC that doesn't have kids addicted to gaming apps because all their kids are now 55, I'm telling you that this does not end well. You are going to see, and this will be my prediction, in 2-5 years, you're going to start to see articles about another reason why male suicide is skyrocketing in the US and is 4:1, male to female, is more and more men are killing themselves because they get in too deep, because they got in way over head, wave over their skis because of gambling apps. So what do you do? That's the hard part. I don't think you can infantilize these kids. A certain portion of this revenues does go to gambling education, and gambling education has dramatically risen along with the revenues here. But I think we got to teach young people in school basic neurochemistry and adulting and basic financial literacy that says, Hey, as a young man, you are especially vulnerable.

If you want to take a a little bit of money and instead of going to the movies or instead of buying a skateboard, you want to do this, fine. But don't think that this is in any way investing. And do not, do not gamble money you can't lose. It just discourages the shit out of me that the wealthiest Most, most, resource, brightest people in the world are trying to figure out how to fuck young people and tap into a flaw in our instincts and an absolute blind spot around regulation. Anyways, that's my TED Talk.

We'll be right back after the break with a look at one of the biggest deals in YouTuber history.

Fox Creative.

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We're back with Profitou Markets. A popular YouTube channel called Dude Perfect, known for its viral videos of sports trick shots, has raised more than $100 million from a private investment firm. Dude Perfect has more than 60 million subscribers on YouTube, putting it in the top 50 most subscribed channels. Now, the creators behind it are hoping to use the fresh capital to expand beyond that platform. They want to grow their consumer product offerings, launch a streaming site, and host more live experiences. They even want to build a theme park. Scott, in terms of financials, the only number we have is their 2022 revenue, which was $25 million. Now, I'm sure it's grown, but for a company that's likely valued at, I don't know, at least $200-$300 million, they raised on the low end $100 million on the high-end $300 million. $25 million in revenue feels very low. So what do you think this private equity firm, High Mount Capital, sees in Dude Perfect?

What they see is the next Mr. Beast. What they see here is an opportunity that the media is headed this way, and they see, All right, this is the future. This is the next generation Disney that has a flywheel that creates a ton of media. They get some money, but then you can monetize that goodwill and that viewership by getting people to come into the Dude Perfect stores, or maybe I think they're planning a Dude Perfect park or Dude Perfect licensing agreements. It's the Disney flywheel that's trying to be recreated here. And increasingly, we were talking about this on the call. I was talking to Farid Zecaria, who was on the podcast. By the way, our last two podcast guests on Prof G have been Farid Zecaria and Jonathan Hyte, who are the number one and number two best sellers. And it's clearly because they were on our pod. Let's just be honest. Mediocre books, these guys aren't there credible. But coming on this pod is just huge. Anyways, I was talking to Farid, and basically, the future of media is if you want to make really big money, you've got to be multidimensional or multimedia.

And that is, Farid does an amazing Sunday morning show. He has books. My guess is he will launch a pretty successful podcast. To be monomedium, it's really hard to make a living. Because if you're fortunate enough to be really good at podcasting, it's really hard. And the way you make money is that 20 or 30 % of your viewers would be willing to give you trial at a low cost in another medium. The same way Disney says, Okay, our Star Wars movies, we squeeze that limit as hard as we can, but then we build rides at the parks, and then we build licensing agreements through Hasbro. In other words, you get a huge cost advantage over other stores and over the other toy manufacturers because 20, 30% of your customers from another medium are willing to engage in the new medium at a very low cost. And the same thing is going to happen in media. Your analysis, though, is the right one, and that is at some price, almost every company is a good or a bad investment. To me, the thing that struck out is that they're raising 100 to 300 million. Typically, investors want a quarter to a third of the company unless it's a private equity firm that's buying the whole thing.

Private equity is usually for companies that are cash flow positive and bigger. This is a growth investment, which means this company is valued at what looks like somewhere between 3 and $600 million And the fact that it had 20 million in media sales, I just think I wouldn't get near this if I were an investor. I think it'll be fun to watch. But this, to me, feels as if they're overpaying.

You mentioned this trend in the creator economy where you have these individual creators, whether it's on YouTube or in podcasting or even Instagram and Twitter, where they're going out and they're starting their own diversified media businesses. Mr. Beast, he's a YouTuber, but now he's launched a company that sells chocolate bars at Walmart, and it's actually been very successful. It has its own burger brand. It even has a nonprofit arm to the company. Another example would be Alex Cooper from the Call Her Daddy podcast. She's now launched her own podcast network, and a lot of that is because she just doesn't want to be solely reliant on her own show. We do that a little bit, I would say, to a lesser degree. But I'm wondering if you have any similar ambitions for this company. We're primarily a podcast company, but you're not going to be podcasting forever. Do you have any plans or objectives to build out Profgy into something bigger than the podcast? Maybe a Profgy Network, Profgy Brands. Do you see us growing into something similar to what Dude Perfect has done?

So this is probably a good time to announce the new line of Profgy Catheters. Is not flowing?

I quit.

I don't erectile dysfunction drug, but that was too easy. I don't know, two-headed glass dildos. I'm trying to think, what would really work? What would really work. A line of rum. I don't know. My own edibles. That'll be good. That's what I should do. I should have a line of edibles. Yes. That'd be fun. So this is what we have in all seriousness. We've started getting better at YouTube. We're probably making, I don't know, what are we making? We're not We're making a lot there right now.

We're barely making money.

Okay. Everything's stuck. A small acorn turns into a giant redwood, young Ed. The books, we have seven-figure plus contracts for our books. The pods make mid-millions. The newsletter, we haven't monetized yet, but I think we probably will. We're getting inbound interest in advertisers for hundreds of thousands of dollars. Our speaking business is a multimillion dollar business. Now, if we wanted to get really aggressive, we would raise money, hire a president, and start looking at other opportunities like this. The bottom line is, and this is more comes down to personal thing, there's two ways to pay yourself: cash and be profitable and grow slow to medium, or take capital and try and flip the model and make the compensation for all the people around equity, where we try and grow this business for 5 or 10 years and then sell it to another media company or something like that. But I don't have any plans for branded products. We have been approached, someone, one of the big talent agencies who is in the business of finding people with a profile and connecting them with products, who did Kim Kardashian and Spanks called and said, Would you do a credit card around saving?

And I looked at it and I thought, I don't like the fees here. This goes against what I think. Anyways, so we would consider it, but it's like anything else. It's a matter of focus and bandwidth. Do you have any ideas for us, Ed? Any product extensions?

Maybe we should just create a theme park or something. Just keep it simple.

I like that. I like that. A panic room, a room where you go in and you feel anxious, just super fucking anxious and old. I'd like that. That would be good. This is angry land. This is depressed land. Yeah. I would like to design a theme park.

And give you a dose of ketamine at the end. There we go.

Ketamine therapy over here. Passive-aggressive rides over here. Yeah, I like that. I like that.

Good. We've got a plan. Let's take a look at the week ahead. First quarter earnings season kicks off with the banks. Goldman Sachs, Charles Schwab, Bank of America, Morgan Stanley, and US Bank are all reporting. We'll also see earnings from Netflix, Johnson & Johnson, and Procter & Gamble. Do you have any predictions for us?

Well, my prediction was going to be that banks are going to surprise at the upside because everyone was expecting interest rates to come down. Actually, banks benefit from net margin income, and that is they want to loan out money at 7% and they want to give you 3% or 4%, so the margin is expanding in a higher interest rate environment and companies. There's been a consolidation. A lot of regional banks have seen outflows to the big banks. I think that actually the stickiness of inflation and higher interest rates is going to result in an earnings surprise at the upside. But I like the prediction we made real-time here, and that is, I think in 2-3 years, we're going to see the externality of the frictionless gambling environment where these companies are prying on the poor instincts or the weak instincts of individuals and the fact that our regulators are so old that they don't really think about the challenges the young men face. I think we're going to see, unfortunately, some very negative externalities from an explosion. What is the second fastest growing business in the world right now? And that is online gambling.

This episode was produced by Claire Miller and engineered by Benjamin Spencer. Our executive producers are Jason Stavers and Katherine Dylan. Our associate producers are Jennifer Sanchez and Allison Weis. Mia Silverio is our research lead, and Drew Burrows is our technical director. Thank you for listening to Prof. G. Markets from the Vox Media Podcast Network. Join us on Wednesday for Office Hours, and we'll be back with a fresh take on Markets every Monday.

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