In my view, if you have a 20 year plus

horizon,

the key is to be diversified. You don't

need to find the needle in the

haststack. Just buy the whole hay stack

because you have you want to play to

your strengths time horizon so you can

withstand volatility. You absolutely

want to do lowcost funds and you could

probably get into some alternatives

whether it's private equity or funds

raising money for venture capital at a

low fee because you can absorb some of

the risk that older people can't absorb.

In today's office hours, we talk about

global markets, starting a business, and

how big tech has evolved since the

before my first book. Question number

one. Our first question comes from John

from the UK. John says, "Dear Scott,

love the podcast. Thanks, John. My

question is on the investment time

horizon. I've heard your recent comments

on investing in US equities versus

international equities and the relative

returns 2026 year to date for each. If

we're looking at a time horizon of

decades, in my case, two plus decades,

does that change your view? For such a

long time horizon, do you still

recommend lowcost index funds? If so, US

focus or others? Thanks. Okay, so the

question does a 20-year plus time

horizon change the case for US focus

versus globally diversified lowcost

index funds. If you look at the past few

decades, what you see is that leadership

is cyclical, not permanent. And that is

the US dominated markets or global

markets for the past 15 years, but

international equities led for much of

the 70s, 80s, and again through the

2000s. So it is cyclical from 2010 to 20

24 US equities outperformed in 12 of the

15 calendar years, the longest such

streak in recorded history. But since

1975,

the average outperformance cycle has

just been eight years. So we went we

have basically a 15 or 17 year winning

streak, which was twice as long as most

most winning streaks in terms of

regions. The current US cycle has

already run, as we said, about 15 years

as of late 2025. If you were to bet

exclusively on the US over the next 20

years, you're effectively betting on

that the longest cycle in history just

keeps going. There's been, and that

doesn't typically happen, there's been a

recent reversal. In 2025, international

equities gained 31% in dollar terms,

outperforming US stocks by about um 15

percentage points, the biggest margin

since 1993. So, here's what the

forecasters are saying. Vanguard

projects US stocks returning just 4 to

5% annually over the next 5 to 10 years

almost entirely driven by stretched

large cap tech valuations and Vanguard's

model gives a 70% probability the

international stocks outperform the US

over the next decade. Fidelity projects

US equities returning 3.2% over the next

20 years roughly a third of the real

returns delivered since 2005. In terms

of valuation or how I like to look at

stuff, uh, over half of the

international sector trades at or below

their 20-year median forward PE. So,

there's still a relatively decent value

and every single US sector trades above

it. Japan looked unstoppable in the 80s

before entering multiple decades of

underperformance. So, it's a cautionary

tale for assuming any market stays

dominant. You know, past performance is

no guarantee of future performance as

they say. So, what's the answer? In my

view, if you have a 20- year plus

horizon,

the key is to be diversified. You don't

need to find the needle in the haystack.

Just buy the whole hay stack. I would

buy US equities. But I would also

diversify across asset classes, not only

equities, but bonds. And I would also

diversify geographically. Now, with a

20-year time horizon and being young,

quite frankly, you can be a little bit

more aggressive. So, if you're going to

invest in a European fund, a Vanguard

European, it might be European growth. I

think you could probably if you were

looking at fixed income look at some

more exotic stuff like distressed equity

or PE fund. I think you can be a little

bit more risk aggressive. If you sounds

like you're a young man if you're my age

you want to start to scale down your

risk and really diversify. When you're

your age you can be a little bit more

concentrated but I would still go across

different asset classes and different

regions but be a little bit more

aggressive in terms of the type of fund

and uh you can endure volatility. You

can invest in funds that invest in

private markets and you could even

perhaps invest in some things that

aren't as liquid because you have you

want to play to your strengths time

horizon so you can withstand volatility.

You absolutely want to do lowcost funds

and you could probably get into some

alternatives whether it's private equity

or funds raising money for venture

capital at a low fee because you can

absorb some of the risk that older

people can't absorb. Uh but again what's

the key? Diversification. If you're just

in spy, you're not that diversified

because 40% of your investment is just

in 10 companies which dominate the in uh

the indices right now. And you also want

to be diversified geographically. And

then you want to pick good funds, very

low cost and quite frankly not look at

them for a long time. Um because not

only is it an investment of capital of

financial capital is an investment of

your time and so you want to find good

funds you feel good about and then not

have to invest your time looking at your

phone or wondering what's going on. You

also may want to take 10 20% of it and

have some fun and pick stocks,

individual stocks that you think might

outperform. It's fun. You learn a lot.

You track them and occasionally you get

lucky. Support for the show comes from

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Question number two comes from Thomas

who emailed us. Hi Scott, first of all,

I wanted to thank you for the great work

that you do. Thank you Thomas. You and I

have similar backgrounds. I was also

raised by a single mom and I too found

my way into investment banking. I'm

currently in my mid-20s and work in

municipal bonds. And while this has been

financially rewarding, I'm sick of

working in corporate America. I have an

uncle who has sold a couple of

businesses to private equity firms and

we've tossed around the idea of starting

a business, but I don't have many skills

outside of what you learn on the job in

IB. I can grind, can do detailed

financial analysts, and can put together

and deliver a great investor

presentation. He's getting older and I

know that I would kick myself if I

didn't take the opportunity to learn

from him as an operator. My question is,

if you were my age today, what industry

would you try to break into if you had

the time and willingness to work 80 plus

hours per week?

Um, okay. So, first off, don't sell

yourself short. Uh, you and I have very

similar backgrounds. I was in municipal

finance of the fixed income department

at Morgan Stanley. So, we're doing the

same thing. And you learn attention to

detail, rigor, analytics by v virtue of

the fact you're at an investment bank,

which are very selective. means you have

really strong skills and you would

probably make a very good entrepreneur

and a good operator. What field you go

into quite frankly is opportunistic.

What fields do you have contacts in?

What fields is your uncle interested in

or already in? So if I said yeah in a

vacuum I would go into the intersection

between AI and healthcare. But I don't

know if you have any interest in

healthcare or skills around AI or the

ability to raise capital which a

business like that probably requires or

if your uncle is in the curtain hanging

business and already has a business with

six vans and you're going to take it

over and do apply put your shoulder down

and grow that business. There is a big

opportunity in the following and that is

if you have a little bit of capital

going and buying a business, baby

boomers, we're we're seeing just an

enormous wave of retirements of baby

boomers, many of whom own small

businesses, right? A landscaping

business, a auto repair business, a

company that's installs appliances.

There's all all of these little

businesses everywhere. And generally

speaking, a lot of these companies, a

lot of these people because of a lower

birth rates don't have many kids to take

over the business or the kids don't want

to take over the business, right? You

know, because what dad does is lame or

they just they just don't have anyone to

take over the business. So, you can show

up a lot of times and buy a nice little

small business and get u seller

financing. In other words, I own, let's

just go with the curtain company, the

curtain hanging company. I just spent a

bunch of money hanging curtains and it

was worth it. I love curtains. Who would

have known? Who would have known? I

would just be just down and crazy. I

just go bonkers with a good curtain. I

absolutely love them. I think they're so

elegant. I think they're so sublime. I

think they say a lot about me, right? Um

anyway, love curtains. So, this guy, I

spent a lot of money on this guy and he

was complaining that he didn't have that

his kids aren't interested in his

business and I think he makes a very

good living. And if you approach someone

and say, "All right, I want to buy your

business. I need one year for you to

stick around to train me and then I'm

gonna give you some cash up front, but

I'm going to give you a royalty or a

tale for the next three, five, ten years

of x% of the top line such that you have

a retirement. So, you basically buy the

business and they finance it, if you

will. There's a ton of opportunity in

small businesses. So, having said that,

maybe your uncle's already in a certain

business, maybe you have a vision for

something, but this is opportunistic.

meet with your uncle on a regular basis.

Try and find something and then start it

and see what happens. And if it's not

working after two or three years, don't

beat yourself up. Go on to the next

thing because, you know, small business

is hard. But also, as a former

investment banker and fixed income, I

found a lot of my skills and training.

It was more about an approach to work,

attention to detail, and the willingness

to work really hard and get along with

others that makes for a good

entrepreneur. So, you have outstanding

skills to be an entrepreneur. Best of

luck to you. We'll be right back after a

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Welcome back. Question number three

comes from the pie is a lie on Reddit.

Hi, Scott. I've been following you since

your book, The Four, which I found to be

an incredibly insightful take on the

success of big tech in our world.

Thanks. By the way, I wrote that 10

years ago. My question is 10 years

later. Well, there you go. How do you

think your analogies and predictions

have held up? Is there anything you

would update given today's reality? When

I first started writing the book in

2015, it was basically a love letter. I

mean, people don't remember. In 2015, we

were trying to figure out if it was

going to be Jeff Bezos or Cheryl Samberg

that were going to be president. By the

way, Cheryl Samberg was supposedly going

to be the VP for Secretary Clinton or

the Treasury Secretary or Bloomberg's VP

and her Treasury Secretary. And people

were trying to get Jeff Bezos to run for

president. And boy, has the worm turned.

And my book was basically a love letter.

I'd made a lot of money investing these

companies. I was fascinated by them. By

the time I got to chapters three and

four and did a lot of research and

talked to a lot of people in the

industry, it turned into a cautionary

tale. And that is I thought something is

wrong here. And I'm not going to be

humble here. The book was precined. I

said don't be fooled. And this is again

10 years ago. There's something wrong in

Mudville. That there's uh Meta does not

have our best interest at heart. Uh

Amazon is using predatory pricing to

basically put other small retailers out

of business, consolidate the market.

Their fulfillment costs went from 16% of

the purchase to about I don't know

something like 40. So the play is

consolidate the market and then increase

increase fees on your third party

retailers. So the core idea of the four

was that the biggest tech companies who

won because uh essentially they won

because they tapped into basic instincts

and that was uh Google was knowledge and

answers. When you pray, what are you

doing? You're sending a query into the

cosmos hoping that some divine entity

with greater processing power than you

will hear your prayer and then spit back

an answer you can trust. That's Google.

Your most personal items, your most

serious queries, you type into Google

now, maybe into cloud or or uh chatbt

and you trust it more than your boss,

mentor, girlfriend. You take your most

serious questions to this new god and uh

that's our brain. Facebook or Meta was

the heart. We want connections. We want

to be loved. We want affirmation. We

don't want to be shamed. Apple was the

genitals and that is status. If you have

an iPhone, it's basically the most

elegant kind of, I don't know,

non-obvious or subtle way of saying, uh,

I am wealthy. I am creative, you should

have sex with me. Only a billion iPhone

contract holders, and those are the

billion wealthiest people on the planet.

Uh, if you don't have an iPhone, you're

kind of sending a signal to the world

that things haven't worked out the way

you'd hoped, if you will, and that the

branch of your gene pool should be uh

should come to an end. And then finally,

Amazon is the stomach. And that is uh my

dog, no matter what time it is, will

just pretty much eat until we take the

food away. Because dogs grew up with the

experience in the on the savannah that

there was never enough food. So they

want to just gorge. And we have a

consumption mindset where instincts

haven't cut up to institutional

production. So we gorge on fatty foods,

on gambling, on porn. You know, these

are things we can't on feeling good, on

alcohol. We we can't when they're put in

front of us, no one is telling us, wait,

you don't need to eat everything on your

plate because guess what? You're going

to have cheap calories in the morning.

That's what kind of what GLP1s do and

why they're so transformative in my

mind. It's going to be bigger than AI is

it it essentially is scaffolding on our

instincts that brings our instincts up

to date. But Amazon adopted the strategy

of Walmart, of Dell, and of China. And

that is the ultimate business strategy

is more for less. And they were able to

attract such cheap capital because Bezos

is such a visionary and such a great

communicator that they were able to

basically give you a dollar worth of

goods for 90s for good 101 15 years and

then consolidate the market and then

slowly but surely start raising prices.

But their scale, their operational

excellence just gives you a dollar worth

of stuff for less than anybody else or

almost less than everybody else usually.

Yeah. And that is that taps directly

into our consumptive instinct. Full

stop. So these companies I thought uh if

you want to build a trillion dollar

market cap company, I think the first

question you got to answer is is what

instinct is this um calling on? What

what is it about kind of our primitive

past that it makes it obvious what this

company is is doing? Also the book was

more about uh a fear around a lack of

regulatory frameworks and the idolatry

of these companies because they were

making so much money was wallpapering

over some very troubling signals even

back then in terms of radicalization of

young men putting smaller businesses out

of business tax avoidance um what Apple

was doing with these double dut

strategies and basically fooling

government into thinking no no don't

regulate us we're your winners and so

essentially section 230 passed in 1997

gave these companies free license to

grow totally unfettered, right? Uh, no

regulation exempt from the same

regulation that a newspaper is subject

to because quote unquote they were on

Nissan platforms 29 years ago. Things

have changed dramatically in some

I think I wasn't harsh enough. I I

didn't I kind of missed

how incredibly damaging it was going to

be to our youth. Uh the weaponization of

our elections or the weaponization of

these platforms by bad actors. Uh I

think when we look back on this era,

we're going to regret the coursing of

our discourse, the consolidation of

industries and income inequality. But I

think the thing we're going to regret

the most is well two things. One, how

did we let this happen to our kids? And

two, the shaping. I don't think people

have really come to grips with how much

we are subject to mind control or

opinion control because of bots

sometimes sponsored by bad actors or the

loudest minority if you will that shape

or shame our views and shape the

narrative. Uh I'm subject to it. If I

say something and a hundred bots or

people weigh in and say Scott you're

tonedeaf just like an old white guy to

say I'm less reticent to say it again.

So we have unfortunately a series of

unknowns and bots and the most extreme

on either side shaping our narrative

which has resulted in polarization and

inability to get this is the least

productive Congress in history is some

of that incompetence of our elected

representatives maybe but I think most

of it is our fault and that is we've all

decided we hate each other and that the

enemy is an income inequality or climate

change or Russians pouring over the

border in Ukraine that the enemy is the

guy the neighbor down the street who has

a political sign that we don't like. So,

I think things have gotten worse. Uh, I

think that it was a cautionary tale and

I think we got more right than wrong.

And I wish I'd been a little bit I wish

I'd spent more time talking about the

impact on kids and how it shapes our

views on politics. And I also wish I'd

spent more time looking at the CCP and

the GRU's impact. Anyways, I might, who

knows, maybe I should do an update and

call it, you know, the five or I guess

it's the 10 now. Big tech's more

dominant. AI is making the biggest

companies stronger, not weaker. Uh tech

companies now look more like

infrastructure than apps. Governments

are starting to wake up and regulate

them. It took us about, if you think

about externalities, it usually takes 20

to 30 years for the public to weigh in.

It took 30 years in tobacco. It took 20

years in opiates and it looks like it's

going to take 20 years in social media.

Social one on mobile in 2013 and I

imagine by 2033

will have pushed back. What's

interesting is Microsoft really held on

and became much more important due to AI

and cloud computing. The new player on

the stage I would argue is Nvidia and

became one of the most powerful

companies in the world because AI

depends on chips and compute. And also I

think people recognize that social media

has kind of shifted from friend to foe,

specifically from friend networks to

algorithm driven platforms including Tik

Tok that do not have our best interest

at heart and elevate content that is

incendiary or more conspiracy-minded

because it's more novel creates conflict

more ads for Nissan more shareholder

value. The original book was more about

consumer psychology and platform

dominance. today. Uh the story is

increasingly about AI infrastructure

uh and compute. That's all for this

episode. If you'd like to submit a

question, please email a voice recording

to office hours of profitmedia.com.

Again, that's office hours.com.

Or if you prefer to ask on Reddit, just

post your question on the Scott Galloway

subreddit and we might feature it in an

upcoming episode.