End of ZIRP Era: Impact on Media & Startups — Full Breakdown & Transcript

[00:04] language. If you think you may be offended, switch off [Applause] [Music]

[00:16] the Inside Mojo podcast where each week we're taking a look back at 20 years of history on YouTube with Watch Mojo. I'm your host Ter Rob and with me as always is Gohabs Go uh Ash Kan Carbish Fusan our CEO and co-founder. Ash, are you

[00:31] okay after the game last night? I'm okay. I mean, as I said, I'm a pretty glass is half full kind of guy. Literally, it's half full. Um, look, we were not even supposed to be in the playoffs. We were supposed to be part of

[00:44] this rebuild. So, we made it. Havs fans are crazy because they're all like, "Fire the coach." Yeah, you're a moral. But um no, but it's just I mean we're down two- nil. It's fine. We defeated

[00:57] the Capitals in 2010 and seven. I would say that the the disparity between those teams was greater. Um obviously, you know, I don't have any There are certain some teams I just

[01:10] hate. Caps some kind of neutral. Uh even though Washington stole our expose, you there. There is a bit of a history. And I remember when I saw Nats game like in 2012, it was like closure, you know. I was like, let's move on. Um, yeah, but

[01:26] look, I mean, it goes to show that like you have to play the whole match. You know, the Habs in the third period are like the reincarnation of the freaking Edmonton Oilers of the A. The first period, it's like they can't skate, you

[01:41] know? They just are a disaster. So yesterday we actually got the lead, but then we lost, but it's fine. And it's funny, I was thinking this is tied to Inside Mojo and today's theme to get there. Um, I've met two uh NHL team

[01:58] owners. Ted Leonis, who owns the Capitals, and Jeff Molson, who owns the Habs. Two extremely different people. You know, Ted Leon is like an immigrant Greek, you know, was an executive, made

[02:11] his fortune at AOL, eventually bought the Capitals. Jeff Molson, son of well, great great grandson of, let's say, the the founder of Molson Brewery, heir to the Molson. Yeah. And then he, but to his credit, he

[02:24] didn't just inherit it. He actually went out raised money in like 2009, I want to say, and maybe not 2009. know much later like 2000 in the 2010s and bought it from George Gillette and uh he's done a pretty good job. I mean the Havs you

[02:39] know the glass is half full and you got to win seven and leave not over till it's over. We've been in this position before not over till it's over and despite the massive uh currency difference between the US

[02:53] dollar and the Canadian dollar. The Habs are, you know, very competitive. Obviously it's a wealthy team. you know, they generate a ton of mean, today I think we're going to talk a little bit about interest rate and

[03:06] make it relevant to YouTube and for entrepreneurs and storytellers. But, you know, all these things go into uh fielding a championship team. And you got to you can't play two twothirds of a game is is the bottom line. This is

[03:19] true. As in business, as in sports. There you go. Yeah, you can. There you go. I can't be like, oh, you know, like I'm just going to pay the bills 11 if you do that, right? I mean, it's just it's common sense. But, all right, let's

[03:32] jump into it. So, today we're talking about 2022 and the end of the zero interest rate era. How did uh let's set the stage. How's uh what was Watch Mojo doing in 2022 and how did this this whole shift affect business?

[03:46] our record year as I've mentioned before in 2021. Um and 2000, you know, we in 2021. Um and 2000, you know, we benefited as did most uh creators of know, so it wasn't like we were shooting movies and sets and co shut us down.

[04:03] Obviously, not a travel business. So, uh we had a pretty good 2020 and a good we had a pretty good 2020 and a good 2021. And then when 2022 started, there was no reason at the beginning of the year to think that things would

[04:18] necessarily be different. Although if you just took a look at the like the the chart of the NASDAQ which is one of the main indexes skewing more technology you were like wow all these companies have seen massive spikes in valuation where

[04:34] there's no more fundamental rationale as to why an investor would pay you know 100 or 200 or 300 times earnings when historically that average of price earnings which is what you pay uh has been 15 to 30 times

[04:49] Right. So now what we're looking at is the history of interest rates. And I too financial, but it's important, right? Because what I learned in right? Because what I learned in 2022 is that really the only thing that

[05:02] matters is the macro. You know, it's like if you really benefit from low interest rates, which is ultimately the cost of capital, the cost of money, and money is cheap, then you could go access capital from through a loan from a bank

[05:17] capital from through a loan from a bank or an investment from uh investors, which could be a venture capitalist, an angel investor, or a private equity somewhere, and there is definitely a cost. So, actually, if you go back to

[05:31] that graph, if you don't mind. So what's important is the important is the historical rates were always higher than they were in in the 2010s and 20s. So let's discuss that a little bit. Yeah.

[05:45] Um there's a lot of graphs here. I found this this morning actually on I think this this morning actually on I think the Wikipedia. But so that red line, the effective federal federal funds rate, it's not really like overnight liber,

[05:58] but it's basically just like the the rawest form cost of capital that the rawest form cost of capital that the central federal reserve like lends central federal reserve like lends money to the main banks. And then the

[06:11] buy it for five bucks, you add a logo and you sell it for 15 or you pay your and you sell it for 15 or you pay your your team $7 for labor or whatever. So then banks add, you know, it's prime rate plus something. You know, if you

[06:25] have great credit, you might pay a few interest uh basis points, a few interest points above whatever the rate is that cost them. But so historically I realized again I guess you have to study economics or finance is your real

[06:41] return is really whatever you think your return was less inflation makes sense if you think you made 10% but you know you've seen that meme oh you got a you know 5% salary increase but inflation is eight well you're you're you lost 3%

[06:55] right so so really as inflation goes up and down really as inflation goes up and down banks adjust their uh fiscal policy in

[07:07] order to stimulate the economy. So, let's just focus a little bit on what the hell happened in the 70s. There was like the OPEC oil crisis. There was stackflation and inflation. It was both stagnant, meaning the economy wasn't

[07:21] stackflation meant that there was this inflation. So, so then to offset that interest rates like when I was really young in the 80s you know my dad was an entrepreneur had successes had setbacks and challenges and I remember like him

[07:36] all that and it kind of like so at an early age I understood that but like rate interest rates were always super high right and then like kind of I went through my childhood and then that's when there was this long-term downward

[07:51] when there was this long-term downward trend um where banks just wanted to stimulate the economy sorry uh yeah the governments wanted to stimulate the economy. So they were like, we're going to bring down the cost of capital, that

[08:03] red line, so that banks are more willing to lend out and investors are more willing to lend out. Now, a little parenthesis, when interest rates are parenthesis, when interest rates are low, it's just basic math. The present

[08:15] value of a company's future earnings is worth more. Okay? Because interest rates are like in the denominator of the Gordon model, the growth model, the discount model in finance. But so long story short, we have all like I'm 47,

[08:31] but if you're a 27 entrep 27 year old entrepreneur or 30-year-old or whatever, you've always basically seen interest rates as like a non- thing. It's like always been low. Um, never really a material cost of doing business. And

[08:47] material cost of doing business. And then what effectively happened is in the late 90s there was a stock market boom where again like the original kind of where again like the original kind of NASDAQ.com bubble boom um led to prices

[09:01] being really high. There was a bubble. Bubbles always burst. The NASDAQ Bubbles always burst. The NASDAQ crashed. 911 happened. So in the 2000s there was this kind of like desire to just stabilize the economy. And then

[09:15] because Wall Street are just a bunch of greedy, you know, it's a cohort that really only, you know, what they say, greed is permanent, fear is temporary. Um, then they kind of chased the latest new shiny object, which was mortgages,

[09:30] which was the theme in that the big short I think. Yeah. which kind of captured you know what happened in the great recession not the great depression of 1929 but the great recession of like 20078 when Lehman Bear Sterns and all

[09:44] these guys blew up. So again to kind of try to stimulate the economy, you see here that there was like a further downward trend and then in the 2010s the federal funds rate at some I

[10:00] mean that the the the rawest form of interest rate the cost was effectively interest rate the cost was effectively almost zero. So you had basically in the 2010s like when watch mojo was really kind of you know in the corner blocking

[10:16] tackling doing the basics there was a lot of free money out there you know there was a lot of money that was was easy to raise investors could go and raise a ton of money to invest because the cost was low. So when

[10:32] COVID hit, basically there were supply chain issues, you know, and I remember like going grocery shopping and I was like, "Hey, bacon used to be $2.99 for like half a kilo." And I was like, "It's now $4.99. It's now $6.99." So it's

[10:48] funny that even I, a relatively like well educated, you know, knowledgeable, smart, sane person in finance at least, I could see prices go up. But even I was

[11:00] like okay there's no structural change and because no matter how experienced you are you know humans make the same mistakes basically but so I could see inflation going up and you could see supply chain and at the time they were

[11:13] like inflation is transitory which is like basically just temporary it wasn't like basically just temporary it wasn't those supply chain shocks took years to inflation rate is going up but so what happened was when inflation was just off

[11:28] the Pazoo and people were still like in this mode of money doesn't cost a lot so I could invest loosely. I could loan aggressively. Um the economy needed to slow down a bit which is a weird thing where you almost

[11:44] have central policy central bankers the way you would force like a patient in a coma to avoid death. Economics you do sometimes force a recession as crazy as it seems. to slow down a very hot economy where

[12:02] mean, look at what happened in Germany, right? I mean, there's a lot of reasons for it in the 20s and 30s. Hyperinflation led to resentment which

[12:14] and say, "Hey, everything's out of control." And when I talk about I go, "Trump is no Hitler." But the parallels between Germany and the US with like even though like Trump's policies against Latinos and the Muslik ban means

[12:30] These are that's why Trump is not exactly an economics major. But so in 22 when the year started there was like business as usual there's no problem but

[12:43] inflation stayed high and around I want to say whether it was March or April um to say whether it was March or April um they decided to boost interest rates very quickly and it kind of slams the brake on the economy. So what I mean you

[12:59] it's a bit weird to just and I don't have a degree in economics or anything it's people but I said if you don't understand the macro like if you're an entrepreneur and in 22 the second half especially you were going to raise money

[13:14] because the investors were like well let's look at our portfolio because some people are going to need to raise more money and the markets are tightening up. money and the markets are tightening up. But so what happened was now this is

[13:27] where my economics thinking kicked in. I said look even though we are not affected like we don't have debt or you know we're not necessarily in in lines of business where immediately you're like we're screwed. I was like companies

[13:39] are going to scale back. When money was cheap they were all over hiring. Google was launching YouTube plus or plus to compete with Facebook. Facebook was launching Facebook watch to compete with YouTube. Microsoft was

[13:53] getting into content out of content doubling down on games gaming and cheap. So instead of leaving it in your bank account and earning and I know we like no interest if you just have cash in your savings account. People were

[14:08] very loose. They were very speculative. But then once interest rates went up everybody started to ask you know twice like hey do we need to hire Joey? like you actually during COVID it was because of COVID when you reached out and then

[14:21] talked we were just shifting to work from home but if somebody in 22 was like looking for work in January they could find it like this but by September yeah nobody's returning your call because companies are like maybe we overinvested

[14:37] and so once companies like Google Verizon Samsung started to question headcount well guess what they also So there was a pullback in advertising and that's why 22 was our first down

[14:52] year. Now if like our bigger peers were down random number 40% 30% we might have down random number 40% 30% we might have been down 10% 15%. Especially after like a rocket ship 20 and 21. Yeah. But it was it sucked because you you are in a

[15:06] precarious position where you're start to worry about your team and layoffs and then you're like okay is this like transitory? Is this temporary? Um and and you knew that after COVID it wasn't it was not temporary. You knew that

[15:20] there was this new world order and things were going to change. So we actually went through a really really challenging 22 and 23. And as much as people like people are like Ash is very excited or he's I was actually pretty

[15:33] calm considering how hard it was because you're like a captain in a ship that's going through a storm. People like when I'm flying I look at the flight they're panicked, I'm going to be a bit worried. But if they're there, you know,

[15:46] it's normal." Yeah, that's a good indicator. I do want to touch on the YouTube channel. So, head over there and check that out. We want to know which of these investments suit your risk return profile the most. Is it Bitcoin and

[16:00] crypto, stock market, cash savings, bonds, or if there's anything that we we'll check that out at the end of the episode. Crack cocaine, the ROI. I'm investment because even to me the finance guy in me, I'm like stocks. I

[16:16] mean, are you talking value stocks or, you know, high growth? But yeah, for the lumping categories together. That's fine. That's fine. Um, I'm curious when Watch Mojo was getting off the ground in uh 2005 2006. Do you think that it would

[16:31] have been possible in an era where the interest rates were significantly Because I'm like crazy and decided to risk every penny I had and then go into debt. Well, let's actually separate that until the debt part. So, I was going to

[16:45] take a risk. Like I was eager, you know, I basically left Ask-Man, pushed out, whatever, you know, but I was like eager, ambitious, driven, insecure, you that [ __ ] it, I could make something happen. I would have done this

[17:00] have been 20%. I wasn't going to go take my money and put it in a bank. Even if you're like, hey, like even 8% a year was you would take, right? And again, if you put your money in the stock market, the historical 7 8% return of the S&P

[17:15] in, you know, eight years. That's like the why compound interest is the eighth wonder of the world, right? I would not have. But you you ask a very interesting money two years later and I went to the banks. Yeah. No, the banks were not

[17:30] going to lend us money in the kind of 2022 environment where everybody is looking at their loan portfolio, any mortgages going down, any bad debts that they have, and that's what happens. That's what happened in the 2008 uh

[17:44] great recession. So, I think I would have started the same way. But obviously, if if interest rates were higher and um debt markets were tighter, then no, I don't think I would have been able to go get um you know, credit

[17:58] lines. I actually got a mortgage on my place because I I the watch mojo wasn't they're like, "Okay, I have a shrink here. You should talk to somebody. Why this?" Um but but the point was it was a very

[18:14] Um but but the point was it was a very very speculative era where cheap money explains why every other day we had a competitor in New York or LA or San Fran launching and they would all take strategies that sound good to investors

[18:28] like we'll scale overnight and you know we'll automate production where I as a [ __ ] like content farms don't make sense and AI is a tool and it could be

[18:40] creative tool, not just the operational tool, but it's you need people to tell stories, you know, whether you like it or not, Mr. Investor. Um, to the delight like, it's good that Ashe feels this way. But I'm just saying there was a lot

[18:53] of my my peers that were like, no, we're going to do it differently. So, they could raise capital really easily, whereas I was like, nope, you know, like my goal isn't the lowest cost. It's low enough is good enough. It's quality.

[19:06] enough is good enough. It's quality. It's balance, right? Um but but it was hard because there was so much competition because money was free. So it's really hard to stay to your not just like your principles in terms of

[19:18] fairness or whatever in your mind but just in terms of operational you know just in terms of operational you know you see just a bunch of idiots lining up one after another jumping like running faster and jumping faster quicker off of

[19:32] a cliff and you're sitting there and you have to be positive and sometimes you're like well maybe it's me maybe it's our business right so and then that also with YouTube you know I don't think YouTube frankly would have uh survived

[19:46] if it wasn't for Zerp. Um and the level of competition that they faced absolutely I mean we could expand on why YouTube but um Zerp just led to you know the whole Zerp era phenomenon became a meme where it was things that only made

[20:00] sense because money was cheap. Yeah. Well that's the thing you mentioned your examples plus and Facebook watch things that don't exist anymore. So ultimately was this a good era for companies? like did they really have uh you know

[20:15] failure after another because people were taking stupid risks? I mean the the reality is both and I'm not trying to be evasive. It's because you know if you first search engine. It was actually the 13th search engine. Um YouTube was not

[20:31] the first video sharing platform. Um so you never I've said it you never want to be too early before consumer demand is there or consumer behavior is is shifted you know so timing is key not just for the small startups but for the behe

[20:45] behemoths as well so I think that zerp enabled this environment where capital was accessible you could raise money you could hire people but the people that

[20:57] built the internet were the misfits and the rebels and the risktakers I'm not saying now but people that work at tech companies, it's like the least risk-taking people, which explains why sometimes innovators also die. You know,

[21:09] I think um uh Google CEO is is a brilliant individual. He seems like a great person as well, but sometimes people criticize him because he's not entrepreneurial, you know, he's probably more entrepreneurial, but the skill set

[21:23] you need to run alphabet, he probably has it, you know, but they needed outlaws at first, right? So, it was just a different era. And when I taught at the dotcom bubble because it was kind of like the history of entrepreneurship. So

[21:36] when we got to do, I was like that was just another era. It was a bit like the in Brazil, you know, it was like just it was a different reality. It wasn't like was a different reality. It wasn't like normal today type of thing. But yeah, I

[21:50] mean obviously it also benefited them in the sense that once they had built these dominant positions, it became harder after Zer for companies to uh compete against Google, you know, because you really needed a [ __ ] ton of money. Um,

[22:06] even now like Open AI has raised a lot like war chests. Um, but it became harder after 22 because the cost of capital goes up. But once you're, let's

[22:19] say, open AI, you know, it's that expression, you don't have to outrun the bear. You just have to outrun the other people trying to outrun the bear. So, it's like everything you could use it to your advantage. If you had not the first

[22:31] in market because those guys usually die, but if you're early enough and your timing works, yeah, you don't care if cost of capital goes up, it almost becomes a moat. And in some ways, you guys have heard me say this, I'm like,

[22:45] "Oh, let's do this overnight. we're successful. I'm like, good idea. Are we because that's how long it'll take. Yeah. Today, people don't have that more. Money costs more. So, you're generally people are more impatient. And

[23:01] generally people are more impatient. And uh we've seen a lot of direct indirect "Well, you know what? This isn't lucrative. I don't see how I can make you're not going to make money today. You're not going to make money tomorrow.

[23:14] Are you patient?" So, you know, I think interest rates could be, you know, an asset or an opportunity or a threat depending on your stage. Let's talk a little bit more about YouTube specifically. So, it's it's an

[23:29] interesting situation at you know, we've been talking about how Watch Mojo's history reflects to some degree YouTube's history as we've both been around for about 20 years. Um, with Watch Mojo's first down year in 22, how

[23:44] Watch Mojo's first down year in 22, how was the how was the platform affected in a in a broad sense, was it the same type of thing, financial struggles or how was YouTube being affected by this? So, YouTube had a meteoric obviously like

[23:57] second half of the 2010s. We actually had our meteoric like hockey growth like let's say 100%. might have been 60 or might have been 300 but like hype rates of return in like 2013 and 14

[24:11] because one it was a small base to grow off. Mhm. But we were just like in 2014 like the seventh or eighth largest channel in the world and you know people like do I miss that? No, because it was also like nobody took YouTube seriously.

[24:25] smaller piece of a pie but that pie is a lot more interesting. But what I'm getting at is after many years in like 2018, 19 uh 20 and 21 when YouTube was growing like 30 40% a year if not more and starting to surpass the revenue at

[24:42] the NBC's and the revenues at like traditional TV. Yeah, YouTube hit a bit of a wall as well, but again it was because they had a meteoric growth after COVID. So the year-over-year 22 23 when you look back, hey, how do we do last

[24:57] year and how do we do this year? They also experienced a bit of a slowdown and we generate a lot of revenues through programmatic which is targeting people based on profile and data. We generate a lot of revenue through YouTube's uh Avod

[25:11] advertising video on demand pipeline where Verizon you know Samsung could be like I'm looking to target a handsome Montrealer named Rob who may be looking

[25:23] to buy a new phone. Oh, look. You you googled like a phone model three days ago. So, they're like, let me serve this ad. Yeah. All advertisers are reducing or not increasing. Many are reducing television

[25:38] spent. They've already killed print. Radio does isn't really a growth market. So, all that money is and was flowing to internet. Historically, it was going to search and display, but video was basically having its rocket ship. And

[25:53] yeah, so there was a bit of a slowdown and that's basically why we uh saw a little bit of headwinds and I would say now in like the last nine months we've been growing again. Um and I think yeah we we basically now are in a very good

[26:07] position uh because we didn't panic you know like it it was tough. Um and it's empathize for example now when I hear like I I I'm I'm I'm apolitical. I don't really have views because I see the good

[26:20] and and bad and everything. Um, but so like I understood why Trump won, but I guy. He doesn't have policy. He doesn't sit there with experts, educate himself, and go, "This is my opinion. Let's He just verbal diarrhea 24/7." And that's

[26:35] questioning it. Americans want that. You know, Americans don't want boring. Fine. This is what you get. The chaos president. I don't gloat though when entrepreneurs, founders, business owners now go, "Oh my god, tariffs killed my

[26:48] business." or oh my god I can't find you know uh labor because you know there's whatever glo I'm like it's it's it's it's unfortunate right um but but ultimately um I also do think though that like you

[27:04] do have to just be realistic that business is meant to be hard you know to them but just in this context that in the the 2010 to 2021 because interest rates were

[27:17] 2010 to 2021 because interest rates were Oh, and VCs needed to invest in a startup to start earning their management fees. They kind of shat the entrepreneurship. They kind of ruined it where everybody could go and just raise

[27:30] money with like a safe simple agreement for future equity. It was like [ __ ] I saw so many entrepreneurs that really needed to go and first get jobs at organizations large or small and maybe prove themselves to be

[27:42] entrepreneurial and then maybe become an entrepreneur. But every kid would come. I'm raising this this app that does this thing. And I was like, this is all [ __ ] You're [ __ ] The world is [ __ ] It's true. I was like, you're

[27:56] smart, but go get some experience. I've said it. I started watch 27. So, in a said it. I started watch 27. So, in a way, we're still kind of flushing the way, we're still kind of flushing the system with the excess indulgence of

[28:09] ZERP. Um, and I think now with the tariff stuff, it's unfortunately going people understand just how disruptive this is just in your planning. Um so yeah, so so I think we're just as we kind of saw a light at the end of the

[28:26] tunnel. Yeah, it is going to be more challenging but again that bear analogy well we still run a pretty lean team and we are pretty you know smart about things. Uh and it's just it's again going to be harder on others who maybe

[28:40] because maybe they were a bit more loose. Um and yeah and I think this is just a reality going forward and not just uh economically but I also think geopolitically. I mean, we were not joking, but I was like, "Okay, the year

[28:54] starts off. Russia, Ukraine, hot mess, you know." Then it's like world, it's like a royal rumble. Then Israel, Iran, and the US are like jumping in the ring like we're here. We're also crazy. And now Pakistan and India, two people who

[29:08] are both countries are very well, India is very heterogeneous. Pakistan is more homogeneous. So I recognize the even one such thing as an Indian. But Indians and Pakistanis are very similar

[29:22] if not for religion. But now you have this religion that is going to drive these two nuclear powers to maybe a conflict. So it's like, you know, just like, okay, I just wake up, take my kids to school, come back, answer your

[29:37] just repeat and then just hope the habs, right? I mean, it's kind of like, what control that much, right? And that's the reality of entrepreneurship. It's a paradox. you think you're in control, but you're at the mercy of Donald

[29:49] Trump's tariffs or Pakistan nuking Delhi. Like, you're like, what the [ __ ] those intangibles a little bit. Like, you mentioned tariffs, but realistically moving forward? And and how does it add

[30:02] an extra layer of of complexity on top of this this situation? I think first of all is depending on the industry you're in, you're either directly [ __ ] or you're indirectly screwed. It's a bit like COVID and the Thanos analogy. Sure,

[30:15] if you're in travel, hospitality, uh, live concerts where, you know, affected right away. You're not going to go rub Vaseline on your face and listen

[30:27] to techno. Maybe not that you're talking about the co the co starting there, mojo a year later. We're like, oh, the tsunami hit us now. Obviously, we got affected because all these advertisers scaled back. So, similarly, if you were

[30:40] for sure, you know, a phone, actually, cars is the best one. cars. There might be aluminum from Canada that gets shipped to the US where at a plant they assemble it and then they might ship it back to Ontario in Canada where they add

[30:54] a component and then it goes back somewhere. So once you start you know adding tariffs even if you don't have that back and forth it's not just an added cost it's just added hurdle right so all those businesses are going to be

[31:08] affected now they may need to you know use their capital to store inventory that has a cost so so effectively costs go up and this is why Donald Trump our supreme leader chief economist when he's

[31:23] like China pays the tariffs no you [ __ ] [ __ ] Consumers pay the tariffs should care about if you're America first cuz your consumers have to fork

[31:35] over. Even Proctor and Gamble, Crest, Ivory, and all that company, which is a defensive company in in poor economic periods because people in theory still need to brush their teeth and buy soap. That's the thinking of defensive kind of

[31:49] stocks. Today the CEO of Proctor and Aml said expect increased prices before long because there's just more cost to it. So what ends up happening in that Thanos analogy is let's say us watch mojo we're like oh we're not affected business as

[32:04] usual let's go hire 20 more people. Well no you [ __ ] Ash because in 3 months if proctoring amble prices go up people buy less toothpaste they brush their teeth less. They they use less toothpaste. Proctoring amble isn't going to be like

[32:18] economy is not doing well, companies only advertise more when the economy does well. If they feel like, hey, consumers are losing their jobs, we're living in Mad Max times. Why is somebody living in my back alley now? Oh, look,

[32:32] that was our neighbor. He's homeless now. You know, like then Proctor and then we're like, oh, wait, we're not making as much money now. Long long term, we're in the best lane. We're on YouTube, digital media, you know, but

[32:46] but but it's not good. But I also the reason why I don't complain I mean we're discussing it here but I'm not there like I like Dave Portoy the the bar stool guy he's he's obviously a very successful clever guy but when he goes

[32:59] portfolio is down 20 million or 10 million and he's like it's 10% I'm like bro you have 200 million bucks then I wouldn't be complaining because there's ton now that's a stickick you know so I don't complain I'm like watch may have

[33:13] some challenges but well compared to all my neighbors who are running you know industries, they're going to be like, "Ah, shut the [ __ ] up." Much more challenging in the short term. Exactly. And long term because their entire

[33:25] business models could be There was a guy yesterday on Twitter on X. And he was like, "Yeah." And it's like people have no [ __ ] principles. Like a month ago, they were all principal. America first this and that or Trump. And now he's

[33:38] it hit my wallet. One of my businesses now no longer makes sense." And people of all, you're a sellout. You're not America. Let's forget that. Let's just set that aside." But he just explained his business model and he goes with the

[33:50] tariffs going up like even if they go up 20 30%. He's like my business model of 20 30%. He's like my business model of importing you know ingredient X no longer makes sense. Yeah. So he's like I'm not going to buy a million units and

[34:06] store them for the future. He's like just there's no more business. And that's the thing Trump has no it's forget he has no empathy. Trump has no like experience. you know the the drawback like when Bill Gates was like

[34:18] good to go out there and talk to people and see real life right but so Donald Trump never experienced that right so when he does these things uh he doesn't understand the effect it has on the average person and I'm not saying

[34:34] they're not exceptional at what they do I mean average in terms whether you're a doctor or a scholar yeah you're not like Donald Trump basically you know yeah forgive me if this is ignorant question but I don't know maybe maybe others are

[34:47] think the same thing but one of my my understandings was that the long-term um I guess strategy would be to bring more businesses more manufacturing into America so that there are less imports what do you think about that like so

[35:03] there are no ignorant questions just ignorant people I'm joking Aristotle never said that that is not a lie I'm just kidding but there are no ignorant questions that's a great question so the problem is again the macro. So Trump's

[35:16] tariffs still need to be put in a bigger macro which include timing. Guess what bro? Americans do not want manufacturing jobs. Americans don't even want office

[35:28] jobs like in office 9 to5. So manufacturing if if if there's not demand for those jobs and the rise of automation and robotics and this has been going on now for decades, you know, like automation has been like tailorism

[35:42] automation is nothing new. We get afraid of AI. It's just innovation and of AI. It's just innovation and technology. So, to show you like I'm not these guys that bash corporations, you know, but I I see all sides of it,

[35:55] most things have good and bad, but corporations are so greedy and you expect just them. It's just you're not surprised. when they were when McDonald's under it's more McDonald's could do good things in society and

[36:10] community as well. I'm not these anti-corporation guys but especially since I run a corporation a small one but but like McDonald's when faced with just paying people 15 bucks an hour when the law raised minimum wage um they just

[36:23] you might have noticed you go into a McDonald's now everything is just a touch screen a screen. Yeah. So they're like great you know we we're just going to take this path. we're going to go faster. So, the problem with Trump's

[36:38] fundamental um issue, aside from one, not understanding tariffs, not understanding a trade surplus, um I might spend couple hundred bucks a month at the grocery store and the grocery store

[36:51] is not paying me. Why is that the grocery store's fault? You know, it doesn't work like that. the economy and comparative advantage, the fundamentals of uh macroeconomics is that you might be producing bananas, I may be producing

[37:05] phones and demand is coming from different places. You can't go to China and just be like, well, we don't like this or that. So, but but you could if people did want manufacturing jobs and it wasn't like automation. So the the

[37:21] end goal, it's like you chase a dog and then the dog stops and now the dog's going to bite your face, right? So it's not like he really understood the like he could foresee the the consequences of his

[37:35] action. And look, I remain like I personally have not sold a single share care. Like it's it's long-term. I'm not going to start distracting it because you can't time the market. The the key in in fin in investment is time in the

[37:51] market and not timing with a G in the market. The idea is if you just leave historically the best days come right out on a long enough timeline. It's exactly. Yeah. Yeah. So, so exactly. So,

[38:04] so you know, so you don't want to panic in that sense, but I mean the smartest investors are basically now ringing bells and saying no no no this is a structural change. Also imagine if I as the CEO of this company. So yeah, I

[38:19] pitch. You know, that's my mentality. We all work together, but I also I'm not boss. I'm the CEO. But imagine if every day I flip-flopped. Would you have tell your spouse, your family, like, "Hey, I work at Watch Mojo. Uh I don't

[38:34] we're going there. I don't know if we're, you know, vegan menu or it's a confused. You'd be like, "Stability is important for leadership." There you go. So, if you are any company, if you are any government, do you really trust

[38:48] years, Donald, first of all, it's only been four [ __ ] months, but feels like longer. I had hair like, you know, like it's fat [ __ ] crazy. And and it's like on every front, you know? It's like again, I'm as I say, I'm I'm mainly

[39:04] Canadian. I love America. I was born in Iran. I'm very interested in Iran. It's a bit like when it comes to Iran, it's a very touchy and it's very my god that's that should be a podcast. But you do have like these two different sides. You

[39:19] have like these two different sides. You have a side ironically I think let's not get too I would just say you have two sides who are very different in their vision of what Iran should be. Every day Trump some says one thing or another.

[39:35] You get one group that's like Trump is the best. We love him in him. We believe he's our, you know, savior. Yeah. The other side is like, "This guy's a bumble we trusted him." Then the next day he comes out as a barometer of how he

[39:50] oscillates and he fluctuates. And he'll say something that the other side likes. Then the other side is like, "We love Trump. He's so wise. He's not like these globalists, these whatever bullshit." Like, and then the other side is like,

[40:03] "Well, we are disappointed." And I'm like, I tell the ones I engage with on both side, I'm like, stop thinking this man sits there and goes read history books, talks to experts, talks, he's just off the seat of his pants, right?

[40:18] So that to me is a great barometer of how inconsistent he is because he's like that with everything, right? So, um, so yeah, I do think though that a lot of companies are like, well, okay, if Vance wins in

[40:33] 28, you know, Vance, you could hate him. He's a smart guy. He's a clever guy, you know, well spoken to to paraphrase Chris Rock. Um, but he could go easy on the eyeliner, but I don't I haven't noticed to be honest with you. I know he likes

[40:48] to I mean, if that's a natural look, then it's that's great. I guess that's interesting. Um, but my point is Vance is is going to be a formidable guy in is is going to be a formidable guy in 28. Um, and then I still think Trump,

[41:01] Ivanka eventually is gonna just run for it. So, but what I'm getting at, even if you're another government or company uh country, you're not going to really look at this as, oh, it's just three years. You're going to be like, yeah, we don't

[41:14] think America is this safe place for us to be. Now, there is this other to be. Now, there is this other thought where you'll hear Nvidia, companies being like, "We're going to commit to spending a billion dollars in

[41:28] the US." Okay? Some of those turn out to be true, but it's [ __ ] Okay? It's 100% [ __ ] because if I wanted to create a video, still takes days or weeks. So, what do you think is the likelihood of them building like a

[41:42] manufacturing plant? They might say, "We're just going to say this to him because in 3 years he's gone." And I know for a fact because these are the fiber of these people who run these organizations. They don't have

[41:56] any like they just are kind of thinking near-term. So, we're like, let's just near-term. So, we're like, let's just say what he this guy wants and then two years he'll be focused on the election and he's not going to come back

[42:11] and be like, "Uh, you said you were building a plant in Tennessee." You know what I mean? So, it's companies are just going to weather this storm but not really follow through with any. And the reason why I'm disappointed like I've

[42:23] written stuff that not praises but points to Trump's, you know, traits that he has that appeal to his base. you have to be like intellectually dishonest not people like. But I also criticize everybody. I think that's that's fair.

[42:37] The thing is um Donald Trump I think people have learned now like the Jeff Bezos, the Mark Zuckerbergs that you do have to just pander. You do have to butter him up and then you'll kind of you might not get what you want but then

[42:50] you might not get what you want but then you're not going to be the target of his rage. Okay. Right. So I think there's a lot more people and governments that are just humoring him. But one by one, first of all, forget that all the tech leaders

[43:05] of all, forget that all the tech leaders lost paper losses, wealth, like shares. They lost hundreds of billions of dollars in this market correction. In a few years, it'll be higher than ever and they'll get the

[43:18] last laugh. But you also see a lot of Wall Street CEOs who kind of learned not to just be like he's unfit for the White House. Jaime Diamond, who I think would make a pretty good president. He's the CEO of uh JP Morgan. Um Jaime Morgan, uh

[43:34] Jamie Diamond, sorry. Jaime Diamond was like positive, let's say, at at before the election. Now I do think privately a lot of leaders are at least trying to talk to him to say hey like there will

[43:48] be what I read I don't know if it's true Walmart target CEOs told them that in a few weeks and months you are going to see some empty shelves. I'm not it's not see some empty shelves. I'm not it's not going to be Yugoslavia 1974 there. No

[44:02] knock at Yugoslavia and Croatians Bosi but I'm just saying like you know like the Eastern Communist block shelves imagery. Um, and so I think he is not neutered because you don't change. You don't, you know, you don't teach an old

[44:17] dog new tricks. But if you think of him like just yesterday with China, he was like, "Yeah, no, it won't be 145. Won't be zero, but it'll be much lower." Okay. Well, then you're [ __ ] you know, the thing he likes to

[44:29] grab. That's what you are. Understood. Because you just backtracked. You bluff. You admitted to the whole world that you're full of [ __ ] you know? And like I don't really care. What is he going to do? Shut down, you know, watch Mojo. I

[44:42] mean, it's he's got bigger critics, right? I'd like to see him try. No, but I also I I do I don't want to say I like him. I do understand his appeal. I've always understood his appeal. All right. Well, we got some interesting poll

[44:55] earlier. We wanted to know which of these investments suit your risk return profile the most. And Bitcoin came out in the lead with 53%. So, we have some crypto investors. I am a little bit surprised, but I didn't know that uh

[45:09] out there. Yeah. I mean, again, you're asking it's like the propensity of a YouTube viewer and now in week like 13, let's say, or 14 of this podcast, the people now that YouTube is serving this to are probably a bit more

[45:22] creative or maybe they're just interested or whatever. It's not surprising, right? If we were sitting here talking about insurance or taking care of your will, you know, like an older demo, let's say, I'm sure it would

[45:36] be bonds and even the stock. So, it's it's surprising, but I guess not. But what I find really interesting is that the stock market and the bonds are tied. Yeah. 16%. Yeah. Because bonds were left for de, you know, the reality is I mean

[45:50] I I'm a finance guy, right? I mean, so bonds actually explain the economy more bonds actually explain the economy more than um stocks. Stocks obviously capture the confidence that investors have in a company's earning power, but bonds is

[46:05] what determines things. And so the reason why Donald and I I'm surprised I didn't mention this. The main thing about Donald Trump's tariff recession. Like if we're going to be fair, you could criticize Biden for

[46:20] being scenile if he set something through. It's all good. Criticize [ __ ] Joe Biden. I don't care. Like that's not my I'm not here to defend Joe Biden. He he was very unfairly vilified for his

[46:32] age and many things and it's it's not right for, you know, corporations shoot their CEOs at 65. I don't think it's normal for countries to be run by like a 80-year-old. So that I'm not defending. But the difference was Biden left a

[46:46] saying people are not struggling. I'm not saying there are not pockets of, you know, underperformance and struggle obviously and and that you have to address as a as a policy maker, but Biden handed off an incredible economy

[47:00] Biden handed off an incredible economy and like incredible employment levels to Trump who wanted Google this. He wanted to force a recession so that interest rates start going down that this Federal Reserve

[47:13] would then say, "Okay, we brought up interest rates. we can now bring them down because the economy is not hot. It's cooling down. So, we need to stimulate the economy. Forget that. He also is heavily levered leverage debt.

[47:27] personal interest for that. Yeah. You know, if you have a mortgage and your mortgage is $100,000, okay, it sucks if interest had $10 billion worth of loans to god

[47:40] interest rates. And that's the the the shocking thing here that people aren't focused on. But in any case, what ended up happening, and this shows what a [ __ ] he's he is sometimes, interest

[47:52] [ __ ] he's he is sometimes, interest rates actually went up. Why? This is a bit technical. Japan, not even China. China owns a lot of treasury bills and and debt. When when America wants to go invest, whether municipal, government,

[48:06] corporate, they go get investors somewhere. Sometimes they're American, sometimes they're European, sometimes it's China or wherever, elsewhere. But so China is sitting on a ton of debt of the US. They didn't do anything. They

[48:21] didn't even blink, right? Japan started to dump like our ally, you would think, they started to dump. They started to sell a lot of their bonds that were we don't have the same confidence in the economy going forward."

[48:37] What happens if you sell a bond as a if you are trying to raise money, you have to make it more enticing. The way to make a bond more

[48:49] enticing is offer a higher interest rate. Erggo interest rates start to go rate. Erggo interest rates start to go up. So Trump's entire bet that I'm going to do tariffs to raise money because eventually he wants to have no income

[49:02] tax. So, he's hoping and that's also a false idea that doesn't work in 2025. And then two, I'm going to slow down the economy to bring down interest rates. It backfired once interest rates shot up and that's why I go the bond market is

[49:15] that's when he started to back down because he was like, "Oh [ __ ] if interest rates actually go up, plus everything else I've done, then he's going to be known for destroying the the American not just economy." And I don't

[49:29] of an empire is 250 years old. I think America's resilient. America is going to survive anybody. But next year it turns 250. And as we were joking, it's only been month four. You know, we've got a video coming up on that about the the

[49:41] American empire, the average age of a of an empire and how American is turning 250. So that that that'll be interesting one to see. Just want to finish up on the poll. Cash savings unsurprisingly comes in last, which, you know, savings

[49:54] at this point is not even an investment because, you know, with with inflation, you're you're losing money year-over-year. So yeah. Yeah, I mean leaving Yeah, I don't think leaving money in cash or savings is like ever a

[50:08] good idea unless it's like a little bit because you you want to be liquid, but this where inflation is high, your money does lose uh value very quickly. All for next week's episode. I think we're still working on the dock. Is that

[50:23] right? How's that go come along? No, the dock is good. So, actually since last week I I started to kind of shape it and mold it a bit more. Um, and then also mold it a bit more. Um, and then also because of the 20-y year anniversary,

[50:36] seeing a lot more articles being written about YouTube, I did kind of like, you know, update it a bit because the the script was written months ago. I just was like, needed some refreshing. No. Yeah, I didn't not refreshing, just

[50:51] updating it because YouTube is is the world is changing. I mean that's also a a reality that just whatever was the situation status quo in anything a month fundamentally different now and not to be dramatic but you know there's a lot

[51:06] of people that are like yeah you know the the way they view us and everything forever. All right. Well, in the meantime, next difference between bootstrapped uh companies, I guess, versus uh VC or PE

[51:23] backed ventures. So, and we're doing it on Friday because we're both traveling. Yes, we will be away next week. So, next week's episode will be on You want to want to keep it on the bound? What do you is this admission? I I'll just say

[51:38] that I was invited to Washington DC to uh attend an event where uh members of Congress will be briefed on uh UFOs or UAPs. So very interesting. Should have some uh you know follow-up content for our our unveiled podcast. Uh and uh

[51:55] yeah, I I'm very much looking forward to that. So maybe I'll uh I'll let you guys know how it goes next. Yeah. And I'm just very happy for you. And that's the thing again, like it's a it was a topic theme. You started doing it, it

[52:08] snowballed, and now you're getting invites apparently to go rub elbows with uh, you know, Donald Trump and then plan to like, you know, invade Watch Mojo and you know, there's so many people that sit and wait for everything and you do

[52:24] have to create things, you know, you have to create stories, opportunities, and and then things, you know what I Like if four months ago I would have that six months ago that I would be doing what I'm doing now. So yeah and

[52:37] I'm very happy and relieved. I was a bit anxious all week cuz uh our friends in anxious all week cuz uh our friends in Brazil uh decided to uh require visas to enter the country. I'm going there for web summit and I did not have my visa

[52:49] until literally like 30 minutes before the show. So I was like if I show up there at the visa at the consulate I'm like some security guard's going to tackle me type of thing. you're going to show up, but I got it. So, yeah, I'm

[53:02] going to be also back next Friday. Excellent. Well, it's going to be an exciting week and uh we'll see you guys all next Friday. Cheers. Take it easy.