Breaking Down 2024 Predictions + Audience Comments and Pushback | Prof G Markets

TikTok offers singular power through its single-channel design that uses AI-driven algorithmic signals to calibrate content calibration to individual preferences, eliminating the need for 400+ channels because the algorithm knows exactly what the user wants, whereas Netflix requires users to spend ~50 minutes per week deciding what to watch—a massive choice tax.

“I think that Tik Tok offers something so singular and so powerful that we miss it and that is it's one channel there's no choice it uses the signal liquidity of all the different actions you provide to the algorithm the AI driven algorithm of what you're enjoying or not enjoying and it begins to calibrate in on content that is just extraordinary and why do you need 400 channels you don't you only need one as long as it's the right Channel and it knows exactly what you want consumers spend something like 50 minutes a week deciding what to watch on Netflix so how much would someone have to pay you to say all right this week you're not taking a vacation you're sitting in your living room and you're deciding what you're going to watch for the rest of the year on Netflix”

Audience prediction: Consensus is predicting an 'immaculate soft landing' for 2024 (inflation falls without recession), but this is wrong; a recession will occur in 2024.

“in 2024 everyone looking ahead is predicting a kind of Immaculate soft Landing where inflation calls but there's no recession um and I think I think that's misleading and it's wrong I think there will be a recession my prediction is that in 2024”

Audience prediction: EU electorate has lurched to the right but this is being missed by polls; when EU parliamentary elections occur in summer 2024, voters will pull levers for right-wing candidates in larger numbers than polling suggests.

“My prediction for 2024 is that the EU electorate has lurched to the right and it's not being picked up in um polles really but I think it's going to be when voters walk into the voting booth for the EU parliamentary elections coming up this summer I think that they're going to be pulling the lever for the candidates on the right side”

Newspaper advertising market continued to capture 15% of advertising dollars despite receiving only 6% of consumer time, until eventually advertising dollars realigned with actual time spent; this pattern is now playing out with TikTok and other digital platforms where ad spend lags behind time allocation

“newspapers were getting 15% of all ad dollars despite the fact they were only getting 6% of people's time eventually money matches time spent or eyeballs and every year every day uh Tik Tok is garnering more and more time of the most valuable consumer in the world”

GLP-1 drugs (weight loss medications) will be 'Tech of the Year' for 2024 because the obesity/diabetes economy represents $1.7 trillion (~8% of US economy), and declining obesity rates will cascade into massive impacts across consumer companies (McDonald's, PepsiCo, Coca-Cola), kidney dialysis companies, medical equipment manufacturers, and mobility device producers.

“I think this is going to have all sorts of impact and the diabetes or the Obesity economy is $1.7 trillion it's I mean what is that that's like 8% of the economy and if you look at McDonald's pepsic Co General Foods if you look at cocacola they're literally obesity indices as obesity has gone from 30 to 40% as morbid obesity has gone from 5 to 10% in the last 10 years these company stocks are up 7 10 20 fold and when you see a decline in obesity and morbid obesity I think you're going to see the same type of uh deceleration in these stock prices”

Warner Brothers Discovery will face activist investor interest or acquisition attempts because John Stanky (formerly AT&T) insisted on single-class share structure when selling Time Warner to Discovery, ensuring takeover possibility premium always exists in the stock.

“there's a scene in Wall Street where Charlie Sheen keeps saying why do you need to wreck this company because it's wreckable all right and Warner Brothers Discovery is breakable in the sense that it has a single class of shares what John Stanky at AT&T demand was that if he was going to take stock in exchange for selling Time Warner to Discovery that he wanted to be a single class of stocks such that the likelihood that a takeover might happen is always there and therefore there's a takeover premium in the stock”

Netflix entering sports is strategically misaligned with its non-perishable content business model; sports content requires live viewing because of perishability and because viewers will tolerate advertising for live events, whereas Netflix's value proposition is curated, permanent, binge-able content without advertising.

“what do you think of Netflix moving into sports it strikes me that that I don't want to say it doesn't make sense but the reason why Sports captures so much revenue and such extraordinary uh rights fees is because it's one of the few media vehicles that people still want to watch live meaning it's some of the few media vehicles that people will endure advertising it's the same reason Netflix isn't in news and that is news and sports have a perishability about them and Netflix is in the business of non-p perishable content I'm watching squid games I think that's two or three years old but it doesn't matter and they have it all and it's all cute up and ready to go and I can binge watch it whereas when you watch CNN you don't want to watch day old CNN”

The geopolitical landscape is becoming bipolar (China/Russia vs US/Europe), and the real swing votes are India, Saudi Arabia, and Indonesia/Turkey; suburban moms in Ohio will effectively decide the US president, who will determine Ukraine's fate, making strategic alignment with India and Saudi Arabia critical for US interests.

“the world is becoming bipolar that is China and Russia versus the US and Europe the two key swing votes just is less than 100,000 Suburban moms are going to decide who the next president is do you realize a bunch of moms in the suburbs of akan Ohio are going to decide the war in Ukraine basically they're going to decide who wins because whoever wins president if Biden wins president Ukraine probably wins the war at least it's at a extended stalemate if Trump is reelected Putin is won and the soccer mom or the Suburban mom in akan Ohio is India and the kingdom to a lesser extent Indonesia and turkey”

Saudi Arabia will normalize relations with Israel because MBS is reforming at a faster pace than any nation on earth, the Kingdom is pivoting toward capitalism, Israel has tech and needs capital, and the Kingdom's quiet response to the Gaza conflict (avoiding inflammatory rhetoric) signals they are willing to wait for normalization despite near-term conflict.

“I think the kingdom is making reforms at a faster Pace than any nation in the world and granted that's from a bad place but every 3 to six months MBS rolls out new reforms whether it's and this sounds incredibly primitive but women being able to travel without the permission of their male guardian or women being able to drive or you know or alcohol whatever it is they are reforming faster than any nation in the world and the other kind of anecdotal observation I would make was when I was in mikos I noticed that at all the clubs all the tables were filled by kids from the Gulf I think they are pivoting towards capitalism and the other large economy in the Middle East is Israel they need tech Israel needs Capital it seems to me like a marriage made in heaven”

San Francisco has priced itself out of the market and is unable to address the homeless problem, making it both bad and expensive, causing people to leave and collapsing the commercial real estate market while residential rental and housing markets begin to decline for the first time.

“San Francisco prices itself out of the market and is unable to address the homeless problem so it's both bad and expensive which means people leave and you see basically the commercial real estate market has collapsed there and even the rental and housing market for the first time is starting is starting to decline”

India is the 'new China' because India will bring more people into the middle class than China in 2024; India is now the most populous nation, lacks China's demographic problems, is growing off a smaller base, is a democracy with more English speakers and PhDs than any other nation, and is geographically positioned as a swing vote in geopolitics.

“this year India will bring more people into the middle class than China it's now the most populous nation in the world and it doesn't have the same demographic problems that uh China has uh in addition it's just it's just got it's growing off of a a a smaller base and all the things we said about India 30 years ago still still hold true it's a democracy more English speakers than any other nation in the world I think more phds and it's kind of a Swing Vote in terms of where it is geographically”

Remote work arbitrage (relocating workers to lower-cost second/third-tier cities) is already exhausted; anyone who could benefit from the geographic price differential has already moved, and we will see a slight uptick in office occupancy rates in 2024 as companies formalize requirements for more regular in-person interaction.

“anyone who could engage in the remote work Arbitrage is kind of done so and I actually believe you're going to see a little bit of an uptick a little bit of a return to to the office we've been thinking about that a propy here I believe that 2024 we need to have more people I don't want to say in the office but we need to have a more formal means of getting more people together more regularly”

Alphabet is the 'Empire striking back' in AI; Gemini combined with proprietary data access (Gmail, YouTube, calendar) gives Alphabet competitive advantage, and the stock looks reasonable on relative valuation versus other mega-cap tech stocks.

“who's the Empire striking back then I think it's alphabet and that's my big Tech stock pick I think Gemini and its access to uh proprietary data including your Gmail account YouTube your calendar I think it's going to give them a leg up and have all sorts of really interesting applications that'll that'll get people excited again about alphabet also on a relative valuation basis it looks reasonable compared to the other guys”

US inflation will drop below the Fed's 2.5% target in 2024 because AI is fundamentally deflationary; AI will make companies more efficient and productive, those cost savings will pass through to customers, and wage inflation (the stickiest component) will moderate as workers fear AI-driven job losses.

“US inflation drops to fed's Target of Two and a half% I think it might even go lower I see AI is deflationary Danny blanchflower who we talking about in the last episode Economist from darmouth said there isn't a modern economy that hasn't been able to tame inflation because inflation is sort of a self-correcting mechanism where prices go up dampens demand it comes down and I just think AI is going to be everywhere and uh for our previous comments make companies more efficient more productive and it'll be so ubiquitous that those cost savings will be passed on to the client or the customer which will ultimately deflationary”

Search represents the world's largest 'toll booth' (systematic ability to extract value by controlling an essential transaction point), and Google's search monopoly remains intact and highly profitable despite recent disruptions from AI and mobile apps

“I think alphabet still has the largest toll booth in the world in the form of search”

Disney stock is at a 10x PE low, has iconic inimitable assets, and a park business generating $10 billion in EBITDA annually; the park moat is singular because the IP leverage through rides combined with the barrier of building multi-hundred-acre parks over decades creates competitive separation Netflix and other streamers cannot match within 10-20 years.

“I think Disney's going to get put in play if it doesn't it stocks at a 10e low it's got iconic you know inimitable assets and it has a park business that's doing 10 billion in EA that really is singular the park business in my view now granted you would argue that the figures of the IPS the real moat here but they leverage their IP with rides at at Disney and also just the moat of building several hundred, acre Park that takes decades it doesn't you know Netflix can't do that or at least they can't do that within 10 or 20 years”

Western nations, especially the US, will make big strategic bets to diversify away from China and toward India for manufacturing and investment, similar to the historical pivot to China for emerging market growth.

“I think just as people were looking to China for you know incredible manufacturing might and to invest there because of an emerging middle class I think that the same excitement and the same Dynamics are forming in India and I think America is going to say and a lot of Western nations are going to say we probably it's not probably a bad idea to diversify away from China and make some big bets in India so I think all the moons are lining up for India”

YouTube's ad model is superior to traditional cable's model because the 5-second skippable ad format is less offensive to viewers, and YouTube maintains the largest 'toll booth' in the world through search while having growth vehicles in YouTube and recognizing AI benefits

“I think that alphabet still has the largest toll booth in the world in the form of search has growth vehicles in terms of uh YouTube and I think that it's about to recognize that AI inspired bump party that they were sort of left out of”

Galloway distinguishes between consumer choice (corporations and individuals can choose not to advertise on Elon Musk's platforms) and geopolitical necessity (the U.S. must do business with Saudi Arabia despite human rights violations), arguing that capitalism allows consumer/corporate choice, but statecraft requires realpolitik calculations that sometimes conflict with moral purism

“I think America should continue to do business with Elon Musk I think they should continue to buy his products I think they should continue to produce great graduates for his for his companies I think they should continue to host him and provide him with the same rights as any other citizen I don't have to buy his car or be on his platform as a consumer it's pretty simple and when you're talking about nation states and geopolitics yeah it's I think it's easy to be a purist”

Strategic accommodation of Saudi Arabia despite human rights violations (murder of Jamal Khashoggi) is justified by realpolitik: the US also committed atrocities (420,000 deaths in Iraq), and prioritizing American prosperity requires pragmatic engagement with geopolitical partners regardless of moral imperfections.

“I mean for God's sakes we went into Iraq under false pretense and killed 420,000 people but because it's 420,000 people and we don't know any of their names you know it's like what's what what is it Stalin said one death is a tragedy hundreds of thousands of deaths are a statistic so I am very focused on the well-being and the prosperity of the US and I think that that Prosperity is best served is best served by one continuing to do business with Elon Musk and creating an environment where Geniuses like him he is a genius continue to innovate”

Audience prediction: An above-ground nuclear bomb will be tested in 2024 due to one of three scenarios: (1) Russia launches one to deter NATO and end Ukraine war with new borders, (2) Israel launches one to declare nuclear power status against Iran/Hezbollah/Hamas/Houthis, or (3) China intimidates Taiwan with nuclear threat as D-Day anniversary (80th) approaches.

“My prediction is not a fun one as I believe that in 2024 we will witness the testing of an above ground nuclear bomb I think there's three scenarios that could spark its return number one Russia could launch one to deter NATO and bring the war in Ukraine to a close with new borders number two Israel could launch one to declare itself as a nuclear power in the face of Iran and its proxies Hezbollah Hamas and the houthis number three China could try intimidating Taiwan into peaceful assimilation knowing that a D-Day style Invasion would be catastrophic”

Galloway personally is not buying these stocks but rather saving dry powder for private investment opportunities and considering selling his largest public holdings (Apple, Amazon, Airbnb) to transition from public tech into credit instruments offering unlevered 12-15% returns and lower risk.

“are you personally buying these stocks no I don't buy and sell that many stocks um I'm kind of saving my dry powder for some private investment opportunities and I'm also thinking about selling some stocks I have uh my biggest Holdings are Apple Amazon and Airbnb I've experienced really solid even extraordinary gains in those and I'm thinking of um getting out of them and diversifying out of tech I have a lot of tech public tech stocks into credit it strikes me that for the first time in a long time you're being paid to be in credit and I have some friends in the distress credit business and you can get kind of unlevered 12 to 15% returns”

Galloway has reached 'Peak OpenAI valuation' not 'Peak AI'; he predicted correctly that AI would be tech of 2023, but OpenAI's $90 billion valuation has fully priced in future performance, and the company cannot live up to the promise built into that valuation in 2024.

“I don't think we've hit Peak AI in terms of its impact on business and the economy I think we've hit Peak open AI valuation I don't think that valuation won't maintain its velocity I think $90 billion and the valuation that the whole magnificent 7 that's been AI driven has kind of been fully Incorporated I think open AI is an amazing company but I think at 90 billion a lot of that kind of amazingness if you will has been factored into that price now I might it might in fact do really well in 2025 but I feel like I don't want to say it's gotten ahead of itself but it is definitely that is a forward-looking valuation there's a lot of Promise built into that valuation that I think it'll recognize I just don't think the performance can live up to the promise in 2024”

Streaming market consolidation will reduce the number of major players, giving Max/HBO greater pricing power; Netflix already raised prices 15-30%, creating pricing cover for HBO to do the same; all platforms are cutting programming costs and the writer strike was a gift allowing them to pause and recalibrate expenses downward.

“I also think that there's a consolidation in the streaming Market that will give Max or better known as HBO more pricing power there's going to be fewer players they're consolidating Netflix has already raised prices 15 to 30% which will create cloud cover for HBO to raise prices and they're all cutting costs they're all reducing their programming lineups dramatically and the riter strike was nothing but a gift to them they gave them the opportunity to take a pause and recalibrate their cost”

TikTok continues to garner increasing mind share and time from consumers, particularly the most valuable consumer segment (young males who buy high-margin products), while Netflix consumption has leveled for both kids and adults whereas YouTube and TikTok continue growing.

“Tik Tok just continues to Garner more and more mind share more and more people's time and I don't know if you remember those charts that showed that people were still like newspapers were getting 15% of all ad dollars despite the fact they were only getting 6% of people's time eventually money matches time spent or eyeballs and every year every day uh Tik Tok is garnering more and more time of the most valuable consumer in the world and that is a young male who buys stupid high margin products and you the data I saw that was really compelling was that Netflix consumption has actually leveled out for not only kids but also for adults while YouTube and Tik Tok continue to go up”

Current GLP-1 access is limited to wealthy demographics (rich housewives, wealthy overweight men and women), not the obese populations who would benefit most, but market competition and government involvement (Medicare/Medicaid coverage) will eventually drive down prices and broaden access to underserved regions and demographics.

“so bottom line is it's not getting to the obese it's getting to ladies of lunch who want to lose that last 10 or 15 pounds having said that I believe and that's who I know is on gop1 is basically Rich Housewives that's what and and fat dudes are my friends who are wealthy and just very overweight guys who are very overweight and women who are modestly overweight that have money that's who I see using it maybe that's just the people I hang out with but anyways say I think those are the only people you know probably true but I do think there is so much money in R&D I do think the Market's going to do its job here and there will be all sorts of innovation and specifically lower pric drugs that do start to permeate or melt into the regions neighborhoods and demographics that most could most benefit from this I also think the government's going to get involved and start probably saying this qualifies for Medicare Medicaid or what have you so I it'll take a while it's definitely not getting to the right people now but I think it will eventually”

Meta's next growth vehicle will be WhatsApp; the platform is finally learning to monetize; WhatsApp has more users than the top 5 telecom companies combined, making it effectively the largest 'telco' globally and an overlooked asset for Meta.

“WhatsApp is a phenomena they're finally starting to learn how to monetize it I'm struck by how many people are on WhatsApp I find myself spending more time on WhatsApp and to M as credit I mean the Instagram was the growth story they kept on giving you know the core platform Facebook was their Cash Cow Instagram was their growth vehicle and now they have a second growth vehicle in WhatsApp that I think will they will start uh really turning on the the monetization Jets in 2024”

YouTube is the fastest-growing media platform outside of TikTok, is bigger than any cable channel, growing double digits, and attracts the elusive 'great white rhinoceros' demographic of young men, making it an outstanding growth engine within Alphabet

“YouTube is effectively the fastest growing media platform outside of Tik Tok and that is uh YouTube and Tik Tok are taking share basically from everybody else and YouTube is now bigger than any cable channel it's growing double digits it attracts that kind of elusive great white Rino and that is young men”

Housing sales will accelerate in 2024 due to pent-up demand from death, disease, divorce, household formation, recent interest rate declines of ~100 basis points, mortgage refinancing incentives, and alternative housing developments by VCs incorporating new cities to circumvent restrictive zoning requirements that entrench wealth transfers from first-time homebuyers to existing owners.

“there's penup to man death disease divorce household formation they just people want to procreate they want to they want to buy a home interest rates have come down about 100 bips in the last 60 or 90 days and I think they'll come down further and in addition you're just going to see certain mortgages roll so the incentive to stick around you can either refinance your house at a much higher interest trate or you can go buy a new one”

Young people should prioritize moving to a superCity before acquiring dogs and children, because superCities offer the highest density of opportunity where the concentration of human capital and financial capital produces superior outcomes.

“one of my big pieces of advice to young people is before you collect dogs and kids get to a super City because that's the density of opportunity the crush of humanity and capital the results in that that opportunity”

Warner Brothers Discovery is primarily a debt story; as management pays down debt aggressively (which it is doing), equity value should increase proportionally assuming enterprise value remains stable, since enterprise value = company value minus debt plus cash.

“Warner Brothers Discovery has been basically been a debt story and that is it has such a huge amount of debt and David zaslov to his credit has paid down that debt pretty aggressively and when he pays it down then the Enterprise Value if it stays the same that means the equity value should go up because the Enterprise value of a company is the what people think is the value of the company minus the debt plus the cash so as the debt gets reduced the value should go up”

CNN will have a strong year in 2024 because election years drive viewership and advertising revenue as people watch political coverage and scandal, making CNN's iconic news assets valuable despite broader media pressures.

“I also think CNN which gets a disproportionate amount of attention uh because it's the most kind of arguably the most iconic asset maybe with the exception of a HBO is going to have a great year because everybody's going to be watching whether or not Trump gets sentence or whatever [ __ ] thing Elon says I think that CNN during an election year is going to print money”

Elon Musk will lose control of Twitter or sell it because the platform's continued decline in revenues, his inflammatory behavior platforming figures like Alex Jones, and his insulting of advertisers (telling Bob Iger to 'go fuck yourself') creates unsustainable financial pressure; creditors (Morgan Stanley, Barclays, BofA) will eventually force action due to interest payment risk.

“I just think at some point this this [ __ ] show that is Twitter jumps the shark and starts infecting his other assets and he's going to make so much money off of SpaceX which is an amazing product specifically starlink and also Tesla was the Golden Goose his new Golden Goose is going to be starlink and at some point when he continues to do do these crazy things like platform Alex Jones it's just going to come back to haunt him”

Advertisers have a free market right to choose not to advertise on Twitter, and decisions not to advertise are not causing Twitter's problems—Musk's inability to moderate hate speech and maintain advertiser-friendly content is what took down the platform

“people and corporations have the right to spend money people and corporations where they want and if someone says to you at a at a meeting [ __ ] you you're under no obligation to continue advertising on their platform as a matter of fact if you want me to advertse in your platform I want you to invite me to your big beach party in can and kiss my [ __ ] ass”

Audience prediction: A third-party candidate will garner at least 19% of the 2024 US presidential vote, surpassing Ross Perot's 1992 performance of ~19%, which would be the largest third-party result in modern US history.

“My prediction evolves around the 2024 US presidential election in recent history the largest third party result was by Ross perau in uh 1992 he got close to 19% of the vote I predict that in this upcoming election in 2024 a third party will Garner at least 19% and probably surpass that which would be a first in a long long time”