Gold Shines Past $4K First Time Ever & Strava and Garmin Are Beefin’

0:28The best B2B marketing gets wasted on the wrong people. dot com slash mbd terms and conditions apply only on linkedin ads good morning brew daily show i'm neil freiman and i'm toby howell today they're singing gotta be gotta be golden on wall street as the precious metal makes history then strava and garmin are beefing right ahead of the thick of marathon season it's wednesday october 8th let's ride

0:58Sometimes you receive life-changing news in the most unexpected places. Paul Ramsdale was hiking with his wife on a three-week trip through the mountains of Idaho, Wyoming, and Montana, completely off the grid. On Monday, he heard her let out a scream and thought they were about to get torn up by grizzly bears. Nope, it was just the Nobel Prize telling him he won. Ramsdale is a renowned scientist who won the Nobel Prize for medicine this week, But with his phone on airplane mode, the committee couldn't reach him for 12 hours after it was announced. It was only when he and his wife activated their phones that they found the messages flooding in.

1:32Thomas Perlman, the secretary general of the Nobel Assembly, said it had never been this hard to reach a laureate since he took over the role in 2016. But there have been other instances of people being hard to reach. What an unbothered, unplugged king. This is becoming a semi-frequent occurrence with Nobel Prize winners. Bob Dylan ignored his Nobel Prize in literature for a couple of days back in 2016. And in 2020, the committee was trying to award the prize in economics. But when the winner's phone rang in the middle of the night, he unplugged it rather than answer. His wife eventually answered the phone.

2:06But when it came time for his fellow winner to accept his prize, the original dude had to go and wake his partner up as well. So I'm seeing a pattern here. I'm seeing some causation here. So if I don't pick up your phone calls, Neil, it's because I'm manifesting a Nobel Prize. It seems like that's what you have to do. They might need a new process here to reach people. Maybe I'll give them a heads up that they're a finalist 48 hours in advance or something. So they're not scrambling to contact them. But yes, congrats to Ramsdale on that prize and for having a pretty epic trip. Okay, now a word from our sponsor, LinkedIn Ads.

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3:17Just go to LinkedIn.com slash MBD. That's LinkedIn.com slash MBD. Terms and conditions may apply. Bruno Mars was right. 24 karat magic is in the air. Gold prices topped$4 ,000 an ounce for the first time ever yesterday, extending a 50 % rally that will make 2025 the best year for gold in decades. It's not exactly cause for celebration. As Herbert Hoover said back in 1933, we have gold because we cannot trust governments. Investors have piled into gold this year because it's the OG safe haven asset where you stash your money when the world outside looks dark and stormy. Tariffs, high deficits, inflation, a declining dollar, an ongoing government shutdown this year has seen its fair share of storms, which has central banks, professional investors, and even individuals flocking to gold, which has shielded value from financial tempest for thousands of years.

4:09And some of the most famous investors in the game say you should be gobbling up even more. Ray Dalio, the founder of the world's biggest hedge fund, Bridgewater Associates, said investors should allocate as much as 15 percent of their portfolios to gold because, quote, it is one asset that does very well when the typical parts of the portfolio go down. Jeff Gundlach of Double Line Capital recommended an even higher weighting in gold as much as 25 percent, citing persistent inflation and a weaker dollar. Toby, I don't know what stocks and bonds you've got in your portfolio, but I'm pretty much evenly split between Pokemon cards and gold bars.

4:41Can't fail with that approach. Let's talk about all the factors that are feeding into this massive gold rush. The government shutdown has not only created a lot of instability, but also this information vacuum, if you will. So that has spooked investors because they haven't had the typical data that you normally get. And that obviously pushes you towards assets that don't necessarily have to rely on official government data dumps like a jobs report. The saying goes that when Washington starts looking like an unreliable narrator, investors start reaching for assets that cannot lie. Gold is one of those.

5:16And then the traditional havens, the traditional safe haven assets of the U.S. dollar, U.S. treasuries have been anything but. The dollar has slumped nearly 10 percent this year. There's just been a ballooning deficit. said it's forced treasuries to lose their kind of pristine reputation. Moody's stripped the U.S. of its top tier credit rating last year. So it has been a variety of things feeding into the once safe haven assets not looking so safe anymore. And again, gold has just been there. Gold's mentioned in the Bible multiple times. It has been truly the oldest asset class in the world. So of course, that's where investors are flooding to.

5:54And if you want to sound like a Wall Street pro on this. You will call this the debasement trade because that is what professional investors are noticing is going on here. What is the debasement trade? Well, it's a bet on the idea that the value of money, in particular the U.S. dollar, is going to go down over time. It traces its origins back hundreds of years, even thousands, to the Romans who reduced the precious metal content, silver, gold, in their coins while keeping the face value the same. And so that's where you get the term debasement. But it's concerning a lot of investors to see other investors bet on the declining U.S.

6:31dollar. Ken Griffin, who is the CEO and founder of Citadel, a huge investor in the space, said he finds the idea of investors viewing gold as a safer asset than the dollar, quote, really concerning. Yeah, his takeaway is that a debasement trade is not necessarily good. A modern flight to safety into gold is not necessarily good. A lot of the financial So plummings of the world are underpinned by the U.S. dollar. They're underpinned by U.S. government bonds as well. So if you are seeing people start to flock to a different asset as a safe haven asset, then that's not necessarily a good thing right now.

7:04So he's saying that there's a little bit of a sugar high in the U.S. right now. And so that maybe some of this cocktail of shaky fundamentals, a booming stock market, but the government kind of running a ton of deficit right now. it's all the ingredients of complacency. It's all the ingredients of something that is dangerous, not necessarily something that's a good thing, even though some investors are probably celebrating while their portfolios are going up while being exposed to gold. Yeah. I mean, if you are exposed to gold, you are having an amazing year. Basket of gold equities has soared about 135 % this year.

7:41Compare that to a basket of global semiconductor firms. And you might think, oh, semiconductors, They're booming because of the AI trade and all of this money that's going into AI. Well, that is up just 40 percent. So gold equities are absolutely trouncing semiconductor equities, 135 percent to 40 percent, which is the biggest gap on record. And what do I mean by gold equities? Well, miners like Newmont Corporation, it's more than doubled in 2025. And you go down the list, gold and silver miners in China, in London, in the United States, in Canada are all booming this year in association with gold.

8:16massive run-up. Moving on, Trump must be a 49ers fan because he can't stop building stakes in mining companies. The White House announced this week it will take a 10 % ownership position in Trilogy Metals, a Canadian mining firm that operates in a key Alaskan region home to minerals like copper, cobalt, and gold. The news that Washington is now a direct shareholder sent the little-known stock skyrocketing 225%, the latest example in a laundry list of Trump playing king maker in the private markets following similar moves to take positions in Intel and two other companies that deal with rare earth materials.

8:52Trump says the stakes are critical to shore up mineral independence and reduce reliance on China, which controls 70 % of global rare earth production and 90 % of processing capacity. The more copper, cobalt, and lithium the U.S. can secure, the thinking goes, the more robust its EV, AI, defense, and renewable infrastructure will be. But the criticism is that these moves smell less of national security and more of socialism in disguise, as economist Tyler Cowen put it, where the government ends up picking winners in building a state-run industrial policy that conservatives have long attacked. Neil, in the meantime, investors have wisened up to Trump's approach and have been pouring through energy and mining stocks trying to figure out what the next winner is going to be.

9:36And that's no surprise because we talked yesterday about OpenAI maybe being the kingmaker by investing in these companies. But truly, it is the U.S. government because unlike OpenAI, they do have infinite money. And when they invest in a company, it's seen as a huge endorsement. And you're seeing share prices absolutely skyrocket for all the companies that the U.S. government has invested in. Lithium America shares have nearly tripled since the Defense Department loaned it$2.3 billion. dollars. Intel was sinking in the water until the United States government took a 10 percent stake. Now it's up 82 percent this year.

10:11And finally, this was the first company that kicked off this whole frenzy was MP Materials, a rare earth miner. The government agreed to take a 400 million dollar stake in this company and its stock is up 376 percent this year. So you can see why investors are looking for the next fish that the U.S. government is looking to pick up. And again, the government is saying, hey, these are very important industries for U.S. national security right now. We need to be involved here. We need the U.S. taxpayer to be involved in reaping the gains from these very important industries as well. But again, Tyler Cowen wrote this piece, and I'll just read a little bit of his argument for why this is not necessarily a good thing.

10:48He goes, think of everything you know about the federal government and how it operates. Do you observe our own government being successful in cutting costs, keeping its debt and finances in line, enforcing standards of accountability? Given those realities, why should government ownership of private corporations be such a good idea? So again, the idea that the public entity that is the government dabbling in private markets is not necessarily something you want as a shareholder of those companies, even though you get this short-term sugar high from it because the Trump trade is alive and well right now.

11:20And I've seen a lot of people on social media and X just peering through whatever speeches Trump gives, trying to pick the next winner because it is just clearly a trade that is going to work if you can somehow figure out where his next attention is going to go. Yeah, there's two companies that surged without even a deal happening. Critical Metals Corp is one. Its stock spiked on Monday after a simple report that the lithium company was basically just talking with the Trump administration. The same thing happened back on Friday with USA Rare Earth, which is another rare earth miner company. And it was just a rumor.

11:54And these stocks went ballistic. But you can understand why investors want to get ahead of any particular announcements. announcements. I'm scouring the S &P 500 or the entire investment landscape to find what Trump is going to pick next because that stock is going to balloon. If you're training for the Chicago or New York marathon right now, I have some bad news for you. Strava and Garmin are beefing. In late September, the run tracking app Strava filed a lawsuit against fellow fitness stalwart Garmin, accusing it of violating patents and breaching a cooperation agreement the two had. Strava says Garmin stole key innovations that define its platform, segments, which are a portion of routes where users can compete for fastest times, and heat maps, visual maps showing where athletes most frequently train.

12:38Strava thinks Garmin replicated these two features on its own platform and devices leading to this rift and sending the broader running community into full meltdown mode. One LA-based running influencer said it felt like mom and dad are fighting in a video with over 500 ,000 views, imploring them to please kiss and make up. Part of the issue is that both brands are so deeply embedded in the running community. Remember, the point of training for a marathon is not to get fit. It's to tell people you're training for a marathon, which is why Strava is such an integral part of the ecosystem. Meanwhile, Garmin's GPS watches are one of the most popular models on the market, and Strava's own data showed that Garmin's decade-old Forerunner 235 was still its most popular smartwatch among users.

13:22And now Garmin has threatened to pull API access from Strava on November 1st, literally the day before the New York City Marathon. So Neil, that would cause a lot of runners to choose sides, keep using the watches they like, or sync their data to Strava, a brutal decision ahead of the beginning of marathon season. Yeah, this is more shocking than Nicole Kidman and Keith Urban breaking up. These are two giants in the space. Garmin stock is up over 50 % this last year. It reported a 20 % increase in revenue to$1.8 billion. It sells all of the gadgets and smartwatches that runners really love to use.

13:58Meanwhile, Strava is a private company, but it has 150 million users in more than 185 countries. It is gearing up for an IPO next year. These companies have worked together, have very tight integrations for over a decade. And if you are a Garmin user, you're also likely a Strava user because you run with your Garmin watch and then that Garmin watch tracks all your running. And for me, it's a 10-minute mile. For you, it's a six-minute mile. But then it uploads all of that to Strava so you can share it with your friends or keep track of your data. And they just work so closely together. So it's truly shocking to see Strava go out there and sue Garmin, one of its biggest friends in this space and one that runners use on a daily basis.

14:38Some might say that Garmin kind of threw the first stone here because Garmin wanted API attribution. So when you go out and do your run and then you upload that data that Garmin collected to Strava, Garmin says, hey, we want to have our name on any data that you are wrapping up and presenting to your users. Let's put a little attribution on there. Strava didn't necessarily like that. And I think Strava is looking ahead to its IPO and saying that, hey, we need our patents in line. We need our intellectual property in line. It's going to make our company more valuable. So let's start suing people who have similar features to us.

15:13But then maybe the smoking gun in this whole thing is that Garmin probably did invent the very features that Strava is trying to claim, the heat map and the segments. All the way back in 2013, they have a case to saying that they were the ones that first came up with this idea. So that's why a lot of users are kind of siding with Garmin in this instance, saying that Strava is turning into this money-grabbing enterprise. They want to shore up their finances and intellectual property ahead of going public. Just going public in general to people feels a little icky as this very community-based thing that Strava is.

15:50So it's fascinating to see where the battle lines have been drawn. Right now, it looks like Strava is being presented as the enemy in this instance. We're going to take a quick break and come back with a story about noise. Toby and I don't work in accounting, so we're shielded from handling company ledgers, bank transactions, and financial reports. But for the pros who do deal with all that, Fispan can help make your job easier. It embeds your bank right into your accounting software, so siloed data is centralized, and you can get more done and gain better visibility into daily cash positions.

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17:41Taxes and fees extra. See Mint Mobile for details. Tell me if you've had this experience. You're watching your favorite TV show, House, on a streaming service to wind down from the workday when all of a sudden you jump from your couch, hands over your ears. The episode cut to a commercial and the volume for the ad was five times what it was for the show itself. Good news if you live in California. Those jump scare days will soon be over. On Monday, Governor Gavin Newsom signed a law that requires the noise level for commercials to be at the same level as the movie or TV series being streamed. The bill, which was passed unanimously by the legislature, was largely the work of one lawmaker, Thomas Umberg.

18:20Umberg had a legislative aide who complained to him that loud commercials on streaming services were disrupting the sleep of his baby, Samantha, prompting Umberg to take action. He said this bill was inspired by baby Samantha and every exhausted parent who's finally gotten a baby to sleep, only to have a blaring streaming ad undo all that hard work. Though Californians who aren't parents of young children probably appreciate his efforts as well. Toby, this is a big deal because California is the entertainment capital of the country, and most companies with streaming services are based there. The state's precedent on keeping ad volume consistent with show volume could have the entire nation California streaming.

18:57I find this very fascinating because basically they're regulating annoyance as policy now. It used to just be regulating what a company can say, what content they can put out into the world. That's what most entertainment regulation has been around. But now it's a shift in focus onto how consumers are actually experiencing that content. So it's like user experience regulation is becoming this new field. And I could see it seeping into other industries as well. I mean, dark patterns is something that we mentioned a lot on the show when you're trying to stop a subscription to Amazon Prime or something like that.

19:34The hoops that companies make you jump through, that's a user experience issue. And we have seen that become increasingly regulated. Now it's coming to noise of ads when you're what you're sitting and experiencing, you're getting almost like noise pollution. So user comfort is becoming almost a right in a way. So it's interesting to see California dive into this kind of new frontier. Yeah, it's not really new. Back in 2012, the Federal Communications Commission passed this Commercial Advertisement Loudest Mitigation Act. And the acronym for that is COM. So that went to effect over a decade ago.

20:09That compelled linear TV and radio to keep the volume of its commercials the same as the shows itself. But that did not apply to streaming TV. I don't think they knew exactly what streaming TV was. So the law that was passed in California essentially compels streaming services to abide by the Com Act as well because they were exempt for it originally. So it kind of brings them in line with this act that was passed back in 2012, which was passed by the FCC after received more than one hundred and thirty thousand complaints in 2010. The vast majority of which were concerned with excessively loud sound of commercials.

20:47So this is not a new problem that people are complaining about. And also noise in general is an economic issue. Again, I am going to cite Tyler Cowen again. I found this on his economics blog, but some researchers looked into the construction of highway noise barriers to see how they change property values. And they found that if you are within 100 meters of a noise barrier, property prices actually rose 7%. And so they put a dollar amount on basically traffic noise and found that the economic burden of traffic noise is$110 billion because it depresses property value. So you can literally put a dollar amount on noise pollution in general.

21:23So I wonder what the dollar amount is being saved here as long as your streaming ads aren't getting blared into your ear holes. It's the textbook definition of a negative externality, which I do remember from Econ 101. Another angle here is why are we seeing so many ads on streaming services? I thought if you pay Netflix$17 a month, you don't see an ad. But with Netflix and Hulu and Disney Plus getting so expensive now, a lot of people are trading down and getting the ad supported versions. So they're seeing a lot more ads on streaming services, which is another reason why this has become a big issue.

21:56And the hope is that when California passes something like this, they have such weight in this industry that Netflix, Hulu, Disney Plus will say, well, you know, if we have to do it in California with its, you know, 55 million people, then we'll just do it for the rest of the country. I don't know about you, but I just mooch off my siblings subscription account. So I don't have have that issue of paying for those. Let's sprint to the finish with some final headlines. Tesla's teaser videos earlier this week primed its fans for a big announcement yesterday, and a big announcement yesterday it provided, if you're a fan of cheaper versions of its Model Y, that is, because that's what the hype was building towards, a cheaper$37 ,000 version of its Model Y that aims to keep demand strong after the U.S.

22:36tax credit for electric vehicles expired. The new model costs about 15 % less than the previous base version, though it sacrifices is some features like a shorter range, fewer speakers, and no second-row touchscreen. Tesla executives say that they delayed building this particular lower-priced vehicle until after federal incentives ended and warned that production would ramp up a little bit slowly. Despite a record delivery quarter last quarter, Tesla's U.S. sales have dropped roughly 6 % this year and unless expect nationwide EV sales to plunge about 24 % in the fourth quarter. Neil, it wasn't a flying car or a Hennessy partnership, But was this still exciting?

23:15No. I mean, just look at the stock price. It was down 4.5%. This was very underwhelming for investors. In fact, the price cut of about$5 ,000 was less than the lost$7 ,500 tax credit. So they are still more expensive than investors wanted. You know, other auto companies are taking much bigger swings at this point when it comes to EVs than Tesla. Ford reimagined its entire assembly line, said it was ripping up the assembly line that its founder had pioneered back in the 1910s in order to make a$30 ,000 truck. Seems that Elon Musk just isn't interested in the car business that much anymore, even though that's where they get the bulk of their profits and their revenue.

23:55He set his sights for robotics and AI and the changes that they're making on their car models, which remind like let me remind you, they have not released a new car model since the Cybertruck in 2023. And the Cybertruck has been a huge flop. So that's why investors were certainly underwhelmed by this particular announcement. And, you know, I think the hype videos, kind of like LeBron's thing, just didn't do a whole lot for anybody. And a sign of how the old guard of investing is trying to stay hip to the new trends. Intercontinental Exchange, the owner of the New York Stock Exchange, will invest$2 billion in Polymarket, a betting platform that allows you to wager on the least dream song of the life of a showgirl by October 10th.

24:35The deal values Polymarket at about$8 billion, illustrating how prediction markets have become a force in finance ever since their breakout moment during the 2024 presidential election. To review, prediction markets like Polymarket and rival Kalshi allow people to bet real money on event outcomes in elections or sports or niche things like music streams. They face loads of regulatory scrutiny, and Polymarket was even banished from the U.S. in 2022. But with the Trump administration adopting a lighter touch, prediction markets have pivoted from defense to offense, especially in the area of sports related contracts.