Elon, Kissinger, Cuban, Haley, IPOs, and Guest Rob Copeland

25:35You can't. It has an exclusion from antitrust. It is a regulated monopoly. They control. It's the ultimate. And so on the supply side, it has scarcity, artificially regulated scarcity. On the demand side, the people that want these teams, billionaires, have quintupled. If you're 58 and worth$9 billion and thinking I'm going to be dead soon and want to be the most interesting person in Cleveland overnight, you go by the Indians or the Cavaliers. And so demand has exploded, supply has gone down. And this is evidence of that. Not only the fact that in 23 years, the value of this company has gone from$200 million to three and a half billion.

26:13But even more than that, he's pulled off the first of its kind in sports that I know of, and that is a dual class shareholder structure. And that is, despite the fact he will now own less than 50%, he'll own a minority share of the company, he's still in control. And I had never seen that in professional sports before. So he said, I want the fame, I want control, but I want to de-risk my economic interests here. But everything, in my view, going back to your first comments, when I saw this, when I saw leaving Shark Tank, raising billions of dollars, I'm like, hello, run for president. That's what I thought.

26:48I don't know. Here's why I don't think it. Look, he's 65. He just turned, I think he just turned, I think he told me, just turned 65. I think he's done Shark Tank forever. You get tired of things. I know I, you know, I'm not doing that anymore, like code or something. It's not the same thing. Well, it's similar. I just didn't want to do it anymore, right? And everyone was thinking I was up to something else. I think he had done it enough and it gets tiring. It gets tiring and boring, I guess, on some level. I think one thing Mark does and the reason he is so wealthy was because he knew the top during the first, that bubble when he sold off broadcast.com.

27:22Broadcast.com for$5 billion. Remember? Radio over the internet. That was definitely worth$5 billion. We actually got off on a bad foot because I'm like, that was the biggest con in history. It's like, how dare you? I'm like, come on. 100%. Come on. 100%. You got in a big fight over it. AOL buying Time Warner. Or my favorite was when Union Square Ventures managed to voice their total shit of Tumblr on Marissa Mayer for$1.1 billion. Yeah. Seven years later, sold for$3 million. $1.1 billion to$3 million. Oh, Tumblr. Oh, yeah. I broke that story. You know, he knows the top. I think he knows. I think he's like, this is a good time.

27:58I need money for something else, whether it's cost plus drugs. I think he's in the back of his mind. He thinks about running. I just was like, he should run. And he's be interesting. People lost their minds. Why do we need another billionaire? I'm like, he's not like other billionaires. I think he'd be an interesting voice in the race. And the reason why I still think there's a chance, Cara, you know, I'm on the speaking circuit. I see Mark pretty regularly. And I oftentimes wonder to myself, why is he at a convention in Orlando speaking to the National Association of Realtors if he's not trying to like, he doesn't need the money.

28:31He's very likable, too. He is very likable. He's got all of the qualities, except for public service experience. He's got all of the qualities for an elected representative. And you get the sense also, he has something that you might have. The reason why I could never run for office, I think he genuinely likes people. He enjoys meeting them and is interested in them. He has a very nice family. His daughter is an internet star of some sort, I think, on TikTok. He has a very nice family. I don't know. I think he's doing a lot with cost plus drugs. Everyone just write me about how mean he was to your startup.

29:06Guess what? Elon Musk is all I have to tell you. Next one, J.P. Morgan CEO Jamie Dimon, another person that they think is going to be treasury secretary or something like that. At the New York Times Dealbook Summit, Dimon urged the room to help Nikki Haley to, quote, get a choice on the Republican side that might be better than Trump. That's pretty much anybody. Haley, it's interesting because he's a, Jamie Dimon is pretty much a Democrat. I mean, he's supported Democratic candidates. Haley has also recently gained support from billionaire Charles Koch's political network and a super PAC called Independence Moving the Needle.

29:41Very important things for her. But a recent poll from CNN showed her in second place at 20 percent in the primary state of New Hampshire. Donald Trump is still far ahead. It was interesting for Diamond to say that. He likes to say things like that. But thoughts? I like Jamie. I think he's an iconic business figure. I think he's smart. And the thing I like about him is he's not scripted. He doesn't check with his PR department and starch everything. He speaks his mind. I think he's been a great leader at J.P. Morgan. I'd love to see him in administration as a treasury secretary. That's where it looks like, yeah.

30:11I think he's very thoughtful. In general, the CEO of a company probably shouldn't be picking candidates this early in the race. But he does kind of occupy a pretty important role. I think it's kind of zero fucks given. He's out in age. He has all the money he needs. He's so well-respected and liked. But back to his point, if we were going to do wins and fails or – I know, but I'm just saying, well, the biggest winner from the last couple weeks is probably Nikki Haley. I mean, she has essentially become what everyone was hoping Ron DeSantis would be, and that is a viable alternative to Trump. uh de santis has just has his his campaign could best be described in one word thud and she has she has been steadfast smart performed really well in the debates and the reality is money matters typically until hillary clinton whoever raised the most money won and and now that she has now that um she not only has charles koke's money they're willing to spend like all these tech bros in the Bay Area who pretend to be players, they're actually pretty cheap.

31:23They usually don't give that much money to these candidates. Whereas the Koch brothers, they'll throw serious cabbage behind. Cabbage and a network of organizations. And she'll be a great contrast. She's a great, when, if it ever gets down, I know at some point it will, but logically if it gets down to, unless there's new candidates, if it gets down on the Republican side to Trump and Haley, she will be a great foil. She'll be a great contrast. Her youth. I don't know. I have this. I think people are going to like. She's very likable. She's very likable. And she has some heinous policies for sure.

32:01But she's she looks like someone you can do business with. Let's just say someone you can do business with. As progressives, the bottom line is I could live with Nikki Governor Haley or Ambassador Haley. And I think you could, too. Yeah. She's shown a good sign. She did the flag. So if she has to do MAGA cosplay because she can't lose them too much. I get it. But she's doing the very least amount she can do, I think. If it's Biden, Haley, she wins. She wins. She wins. I would agree. I don't know. She'd move to the center very quickly, I would think. Oh, of course. And she'd have an easy time doing it.

32:32Anyway, moving on in our news bonanza, Microsoft will have a non-voting board seat on Open Air, like we said they would. Despite owning 49 % of the company, Microsoft previously did not have representation at all on the board. The board now consists of Brett Taylor, Larry Summers, and Adam D 'Angelo, who are working to build out a board. Sam Altman announced that the company did not end up losing a single employee. He's back officially. I'll be talking to him and others there over the next week or so. I think this is exactly what we thought. It's calming down. Let's talk about a stupid alleyway for this company.

33:05But here we are. Microsoft, I think they have a non-voting board seat, but they have enormous influence. That's my take of the situation. Yeah, so the dynamics on a board, in my experience, is there's really only two, sometimes three people that matter on a board. There might be eight or 12 people, but generally speaking, it's the following. The CEO has a lot of power because the CEO is the filter through which the board gets all of the information until at some point the CFO, who is the source of truth and every board member should establish an offline relationship with, comes back with such bad numbers that the real board meeting, which usually takes place in the parking lot after the board meeting, between the two powerful players on the board and they decide to fire the CEO.

33:43Until that point, the CEO has the most power. A close second and then sometimes the first, see above when they fire the CEO, is the person who's invested the most money. It doesn't matter how good, how bad they are, but the person who's written the biggest check, it's capitalism, they have the biggest voice on the board. And then typically the kind of the third leg of the power stool on a board is there's an independent director who has earned everyone's respect, who has professional credentials, speaks less, but carries a big stick, is sort of the deep voice on the board of reason. It serves as Switzerland between management and the largest investor, and usually they get an award at some point.

34:23Those three people control the board. And the thing about an observer seat, it doesn't matter because it has just as much power. And that whoever the observer is from Microsoft— It's going to be the CTO, I think. He will have more power than anyone else on the board, maybe even including Sam, given that Sam's already been fired once. And he's not on the board. Sam's not on the board. Because I've had observers on most of my boards. So my last board, two people from my venture capitalist, and they would show up with a third person, an associate, say, well, this is a good training form. You can't bring him because every voice is representation.

35:00And nothing, Kara, ever actually comes down to a vote. It's all a discussion, and then you kind of hug it out, and then you all vote unanimously. And so every voice in the room, whether you're, quote, unquote, from a government standpoint, actually have a board seat or not, it doesn't matter. So the most important person in that boardroom— Yeah, they have to do that just so you know for regulatory reasons and all kinds of things and all kinds of government scrutiny stuff. But the most important person in those board meetings will be the representative from Microsoft because they wrote the biggest check.

35:31And it doesn't matter whether he's technically or officially on the board or not. He will be in the room making calls and speaking with a$13 billion stick. That's correct. OK, let's go on a quick break. When we come back, we'll discuss whether 2024 is going to be a comeback year for IPOs. And we'll talk to a friend of Pivot, Rob Copeland, about his new book, The Fund, that's made a lot of headlines recently.

36:18We'll see you next time.

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37:07Scott, we're back. We haven't said goodbye to 2023 yet, but 2024 is already looking to be a big year for IPOs with some notable companies in the mix. Rumored IPO candidates include Reddit and Skims, as well as a fast fashion company, Shein, which has reportedly already filed confidentially. It's been an underwhelming time for IPOs, as everybody knows, with Instacart and Birkenstock, among others, floundering in recent months. Is it about to turn around? We can go through these. Talk to me overall, and then we'll go through the individual companies. So I got this wrong. Earlier in the year, I don't remember, I predicted in the back half that you'd seen a resurgence in IPOs.

37:46I thought there was pent-up demand, capital on the sidelines, good companies ready to go. And several companies did get out, but their valuations were too aggressive. The market is much different now, and it's been underwhelming. And it kind of created a new winter again in IPOs. It's been a terrible year for IPOs. And the question is the following. Will these new companies, these are good companies, reignite it again? Is it a cyclical thing? I would argue that the IPO is in structural decline. And typically, the IPO, it served a couple purposes. It was a capital raising event because the private markets, VCs didn't want to put$300 million into a company.

38:25The whole funds used to be$300 million. They wrote checks of$10 and$20 million. And when the company needed hundreds of millions, it went public. And it also provided liquidity for the previous investors and the employees. And now, both in terms of your ability to raise massive amounts of capital and provide liquidity in the secondary market, the private markets can kind of do it all right now. Dial up the Saudis. Dial up the Saudis. So all you do, the only reason you take a company public, quite frankly, is when the private investors go, you know what? This just isn't worth what it was in the private markets in the last round.

38:58Let's see if we can find some idiots called retail investors to buy this at a valuation of 30 times revenues. They take it public. Maybe they fool retail investors for a little while into that valuation. They get out. The stock goes down. But here's the thing. The market has a memory. The market goes, we're sick of picking up your crap. We're sick of picking up the bag you just dumped. And it's put a chill on the entire market. Whereas when Amazon and Netflix and Google went public 10 and 20 years ago, there was still a lot of juice to be squeezed. So what has happened? And all the value in the growth in these companies has been sequestered and captured by private institutional investors.

39:42And the whole IPO market kind of to a certain extent no longer really serves a real purpose. Okay, let's start, though. These might go public. Still, people are still doing it. Let's start with Reddit. They have been maybe going public for a long time. It's been around forever. It's had different ownership structures. It's considered, considering a valuation as high as$15 billion. Obviously, Reddit is the sort of social media communications posting site that's kind of cleaned itself up from its sort of less savory days. What do you think about this? A lot of advertising here, too. So all of this has to be couched against its valuation that they try and take a public ad.

40:24But Reddit, I think, is a phenomenon. I think it's a great company. It's managed to carve out a space in social or whatever you want to call it in a space where no one thought it could be carved out. It became a global brand because of the meme stock movement where all of a sudden certain pages or communities on Reddit literally move the markets. I think it's well run. I would imagine their traffic has gone up. It's a good ad model. I don't know how their ad stack is like. I'm going to make one observation. It's where my kids watch all their videos. It's really wild. They really do. They are always on Reddit and they use it as an entertainment vehicle, a little more substance.

41:01They don't participate in the boards and stuff and discussions, although that's very vibrant, but they find all their videos there. I was surprised when I heard about it, but now I'm not, the kind of thing. Let's get to, and Huffman is a really interesting CEO. He's one of the founders. What about, he came back, long story, but what about Skims? Kim Kardashian's shaper company is valued at$4 billion. She, of course, just debuted the Nipple Bra, which was something I got you that for Christmas. I hate to do a reveal. Thank you. What do you think? It's a great brand. It represents a phenomena of celebrities getting behind an existing product line, bringing it awareness.

41:42Kim Kardashian, she's a global brand. It's a good product. She's a great entrepreneur. She's very easy to be cynical about or make fun of. She's a great entrepreneur. I don't. I'm not. As you know, I'm not. I had her on many years ago because I thought that. But this couple is a really sharp couple who's the actual executive of the company, but she's quite involved, I think. And, you know, putting on that nipple bra was brilliant. I'm sorry. It was. It was weird, but brilliant. And people like the product. There'll be a lot of copies of her, of this stuff. You know, Rianne will jump in here, I'm sure, or something like that.

42:15But smart. She's always moving. Kim Kardashian's almost moving. And I think she is integral to this company in a significant way and not just showing up for things. I don't think she sews everything, but you know what I mean? Like, I think she's very involved, more so than you would imagine. Whether it's Ryan Reynolds and Aviation Jam, I mean. Yes, he's a very comparable character. Just bringing that kind of awareness, or I hate to say it, Elon Musk, the ability to use your celebrity to dramatically decrease your traditional media expenditure required to get that level of awareness gives you a huge advantage.

42:47And they have that. Yeah. And she's not going to tell anyone to go fuck themselves. Anyway, as I mentioned, the fast fashion company Shein has already confidentially filed. It could be a huge one. It was valued around$66 billion in fundraising around in May and targeting an$80 to$90 billion valuation, according to Bloomberg. Shein was founded in China, is now based in Singapore. The company has a lot of issues over the years getting accused of violating labor laws, harming the environment more. Fast fashion is under siege because of environmental concerns, but super, super popular company. There's been several stages to specialty retail apparel.

43:22It used to be the most valuable private company in the world was Levi Strauss and Company, where they would pile Levi's High and Army Navy stores, JCPenney's, and The Gap, which sold albums and Levi's. And then The Gap brought in this genius merchant named Mickey Drexler who said, we control the branding by virtue of the fact that we have the interface with the consumer known as retail. And we're going to put in beach blonde wood, nice scents, oversized dressing rooms, really attractive sales associates, curated music. And then they created their own private label, Gap Brand. And it was casual clothing, consistent.

43:53Yeah, it's The Gap for this era. And The Gap was arguably, I think, one of the best performing stocks of the 80s. And then enter Old Navy, 80 % of the quality, 50 % of the price. Old Navy was the fastest zero to a billion dollar retailer. Actually, that was my first strategy engagement and my strategy firm and business school profit. But anyways, and then the next wave was fast fashion. H &M, Zara, Uniqlo. And they basically said, using supply chain, we can give you not, we can Old Navy, Old Navy. And that is, we can not only give you stuff at the price of Old Navy, but our supply chain is we will send people to the runway shows in Paris.

44:35And within two weeks, we will have reasonable knockoffs of the Calvin Klein. Yeah, and also it's good stuff. I get my, you know, I used to get my T-shirts from The Gap, and now I get them from Uniqlo. They're good. I don't want to pay like forever for Vince. But Uniqlo is casual with Zara. And by the way, the family, the science of Zara became the wealthiest family in Europe. And what they did was they created a sense of scarcity. They would do limited runs. So when you went into Zara, unlike the Gap, and you saw something that was knocked off from the most recent, whatever, you know, Vitan show, and obviously much lower quality, not nearly the artisanship.

45:12But if you didn't buy it, it might not be there in two weeks. And what Sheehan represents is the next wave. And that is through unbelievable supply chain, distribution, manufacturing. On top of fashions. It's hard to stay on top. I used to write about retail. And if you miss, like, if you get the pedal pushers wrong one year, you're fucked. You know, I remember one company was hot, hot, hot. And then it was not, not, not. It's harder, but they keep it simple. That's the thing is a lot of these companies. Another one is Muji is another one that's super popular. I was visiting my friends at CNN yesterday, and I got lost in that mall there, which is a high-end mall.

45:51But it had such an Asian flavor, that mall. Muji was there, I think. You mean at Hudson's? Hudson Yards. Hudson Yards, yeah. It was really interesting. It was packed. By the way, it's a disaster. No, no. It was packed yesterday, I can tell you. Back to Shein. Shein has taken all of that, limited supply runs, knocking off great fashion, unbelievable, unbelievably agile supply chain. And the result is something you don't get or we haven't had in a while. Despite that explosive growth, which usually comes with losses, it's profitable. people. So now their issue is they, by, you know, purposely and no accident, they have relocated their HQ to Singapore.

46:32They're trying to be very responsive to the geopolitical concerns. But more than that, they also are trying to be, I've heard the CEO and the vice chairman a few times, try to be very responsive to concerns around supply chain. Because the reality is, as reporters and supply chains become more visible, I don't care if you were LVMH, the Gap, Nike, everyone has found out that getting you a pocket T-shirt for nine bucks involves some bad shit along the way that you should be cognizant of. And it's happened to almost every major apparel brand. And that's the issue facing these guys. But the next generation of retail appears to be embodied by this company, Shein, that has gone from like zero to 30 billion in zero time flat while maintaining profitability.

47:17And it goes to a bigger issue, Cara. And that is - Keep going because there's no periods in your sentences right now, but go ahead. I get it. I think you're stressed out. You're being less kind today. Yeah, I think you're stressed. I'm not stressed out. It's just there was no periods there. I'm just waiting for a period, but go ahead. Something's going on with you. Something's going on. Even a semicolon would be nice. Maybe a colon, a full colon. Go ahead. I just had my colon checked. Okay. And he said, I have the colon of a 49-year-old. And we're still going on. Land the plane, Scott Galloway.

47:45Jonathan, I'm going to call you Jonathan. Here's the issue. Young people don't have as much money as we did at their age. Fair point. And so the ultimate business strategy, whether it's the strategy of Dell or Walmart or China, is more for less. And that is what Shein is bringing to a younger generation. It's saying, you know what? We can give you more for less. Yep. That's where my kids shop. Uniqlo, Shein, Muji, H &M. That's where they get their stuff. Anyway, and it's nice. It's actually nice. Okay, Scott, we're going to get to our friend of Pivot.

48:21Rob Copeland is a finance reporter for the New York Times and the author of The Fund, Ray Dalio, Bridgewater Associates, and the Unraveling of a Wall Street Legend. This is a book that has made a lot of headlines over the last few weeks and gotten some big pushback from Ray, who's a very pugnacious person. We're going to get into that. Welcome, Rob. This is a pretty scathing look at Ray Dalio and his hedge fund, Bridgewater. You've been covering Dalio for years. First, I want to talk about what about him fascinates you. Sure. He's sort of a larger than life than just a business figure. You know, he claims to have these principles, which he says, if you follow them, they will help you achieve a higher level of self.

48:59He says they apply for life and work. And he's become this sort of endorsed figure from Bill Gates and Reed Hastings and all these technology figures who seem not to realize that the technology at the firm doesn't work and never did. Okay. So you start the book with the author's note saying Ray Dalio does not want you to read this book. And he posted on LinkedIn saying, in part, this is one of those sensational and inaccurate tabloid books written to sell books to people who like gossip. And just this week at the Fortune Global Forum, he said the book is fiction, created as fact, accusing you of making up some of the conversations in the book.

49:35He also noted multiple times that you apply for a job at Bridgewater, information, which you get into the book as well. I think this means you did a great job, mostly. So talk to me about how you're looking at this pushback by this guy. Because he likes to, he has this godlike tendency. He's clearly a narcissist, as many people I cover and you cover are. But he's almost religious in his, he's decided he's become this pundit, this business pundit of some sort. Well, I would say, first of all, I didn't expect him to read the book and say, oh, you got me and go away. So, you know, they fight harder.

50:11He has been, you know, attacking me to distract from his own behavior for years inside Bridgewater, which is so different from the character that he plays on TV. And so I will say, I'm not surprised that he's attacking me. But I am surprised that people don't realize that he's not actually saying anything about the content of the book, because he can't, because we've got him dead to rights there. Right, right. You mentioned he sees himself as like a philosopher. He's like a philosopher king. he's not satisfied to just have$15 billion. He needs you to think he's a great guy too. Yeah, and he's been successful at his company, correct?

50:49I mean, in general, he's been seen as a successful investor and person. How do you assess that, what's happened? Sure, well, not coincidentally, Bridgewater's best year has happened before Ray Dalio makes up this whole public persona for himself as the principals. He's a billionaire before the word principals has ever come out of his mouth. And for the past 20 years, his animating doctrine has just been talking about this, I mean, this manifesto as opposed to investing. And unbelievably, what's been so surprising for me is he's been so successful at it. He has. Well, people are looking for advice, right?

51:29I mean, look, there's a lot of people who are not what they seem. We were just talking about Elon's outbursts at the New York Times event yesterday. People are now seeing a lot behind the curtain, essentially. But in writing this book, you spoke to some former employees and also incorporated internal documents and leaked emails. Let's get into some of the parts and then I'll get Scott to ask a question. But it's full of pretty buzzy anecdotes, whether it's Dalio trying to set up a meeting with Putin, James Comey serving as a sort of in-house inquisitor and a thorough investigation of an incident and a urinal.

51:59It's really fun. It's a fun read. Do you think there's a certain moment or story that gets into the essence of Dalio. You say he also saw Steve Jobs as a model for himself, and he wanted Walter Isaacton to write his biography, of course, but Isaacton smartly passed, I guess. Although not so smart with Elon. Well, and then he goes, he hires John Rubenstein, who was former deputy to Steve Jobs, and takes John Rubenstein about 12 hours to figure out that this is all horseshit. But of course, John won't tell you about that because he took the$50 million and agreed not to talk about it. So that's the oldest story ever told.

52:34Probably the best example for me of Ray is that it's this incident piss on the floor where Ray goes to the bathroom, stands at a urinal, which has happened to many of us in our lives, looks down and sees liquid on the floor under the urinal. And instead of, well, one, not saying anything because that's polite, or two, perhaps admitting that he, Ray Dalio, could be the origin of this liquid, he orders this huge investigation with of what has happened at the urinal and brings in new urinals and sends out an email telling everyone there's piss on the floor. And if you can't aim your pee, you can't work here.

53:09And everyone takes this deadly seriously, as if there actually is something to investigate here. And it's because the principals and Ray Dalio say there's no such thing as a small problem. But nobody can tell Ray to his face, this pee, Ray, it might just be yours. I think we'll start Scott in on after the piece situation. Rob, nice to meet you. So just to be blunt, I found what I've read about your book, it feels like a hit piece to me. And what would you say? I feel as if there's an industrial complex in bringing famous, successful people down. And he struck me, I don't know him well, but I've had him on my podcast.

53:48He struck me as someone who's very successful, has a big ego, has amassed a ton of wealth, and is now trying to, you know, share his wisdom, educate. He's had real personal loss. He and his wife lost their son. He's spoken about that very eloquently and, in my opinion, a very raw and honest fashion. I mean, really showed real vulnerability. and what is it about this guy or Ray that you think is, you know, bad for the business world or bad for America? Because the sense I get from your book is that you feel there's a bit of a cautionary tale here that he's not the guy he portrays. And the guy he portrays, at least to me, and I think of myself as having decent intuition, is huge ego, but hugely successful in trying to be a net positive for the world.

54:44Well, I appreciate the question, Scott. I would say you've bought into Ray's version of reality by talking to Ray. And that is a, it's an Alice in Wonderland reality. It's through the looking glass. And if you take the effort to speak to everyone else around Ray, including the people running Bridgewater right now, they will tell you that that version of reality exists only in Ray's imagination. I'm not saying that you were hoodwinked in any way. I'm just saying if you that we can't just take these business leaders at the at what they tell us about themselves If you take elon musk at the version that elon tells you he will say.

55:20Oh, we don't all necessary No, i'm not. No, no, i'm not suggesting you you do but uh, look that's the you ray is wonderfully charismatic I have been quite um, you know, i've spent some time with him He's been nothing but kind to me, but the person that he is behind closed doors is is vastly different I didn't go out to write a hit piece. I just went out to tell you the truth of what he's actually been like for the past 50 years. So one of the things, it's interesting. I don't, Scott, you're really not going to like my book. I think one of the things that Scott actually does talk about, so it was actually a very good question, Scott, but you talk about the idolatry of innovators in tech.

55:59I think it's the same thing with these, whether it's Lee Iacocca. No, it's the idolatry of wealth. It's the idolatry of wealth and that these people suddenly can bring down from high. And in Ray's case, it's this giant book you could kill a poodle with called Principles. And I think, did he have Principles 2, I think, correct? And 3. And 3, right. Literally, you could kill a poodle with the book. And, you know, it's a rule book for business and life. And I think what happens is they get entranced with their own story. And it's very different. And it doesn't, you know, it doesn't come together with the way they believe.

56:29Now, you quote a former employee who says the Principles was a kaleidoscope of contradictions and barely veiled weapon for abuse. it is culty it is super culty you know people like it Netflix had its code or whatever the one that they fire people with whatever their book of code whatever the heck lots of companies do have this by the way I would imagine Steve Jobs would think this is nonsense he did not have that kind of stuff you know he I don't think he had any kind of code which is interesting I mean other than denying his own blood under oath to avoid child support payments oh god stop it no idolatry of innovators there Tara Okay, because men never do that, Scott.

57:07Men never do that. I've never seen a man do that. In any case, do you see merit in the principles? Is that, you know, because a lot of companies do operate with these things. I've seen a lot, and it's successful in some cases. Sometimes they don't, you know, the way they behave doesn't gel with the principles. Each of these, I'm thinking Netflix is one. There's a bunch of companies. AOL at the beginning had a set of principles. Steve liked to do that. But it's hard to hew to them. But do you see any merit to this idea of principles and running a company that way? I do. And I would say that even the words, the principles is a misnomer because there are no static set of principles.

57:46He's constantly adding and subtracting to them. And he's got a defense on that. You know, life is an evolution and we should be constantly learning. His probably his favorite principle, which is pain plus reflection equals progress, is something we can all relate to. We've probably all been through periods in our life of pain that helped us in the end achieve progress. But what Ray so infrequently talks about is that it's him who's inflicting the pain on you. And there's no degrees with Ray Dalio's principles. There's no amount of pain that seems to not be justifiable for progress. you know, taping a pregnant woman and sending out the recording of that and saying of her crying as you interrogate her over a small thing, you know, a lot of people would say maybe there was another way to do things.

58:36Yeah. So talk a little bit. There was one anecdote, people I know, David McCormick and Dina Powell at their wedding. And David McCormick was his, you know, heir apparent kind of thing, like very, I guess, number two. I don't know if he was number two or number three or whatever, but just the rising young man kind of person under Ray and trainee and at the wedding. Explain this. This story was just astonishing to me. It happened, and neither David nor Dina will tell you it didn't because it did, and hundreds of people were there for their wedding party. I know it did. There you go. I've heard from many people.

59:11You are accurate. May I just tell you, Scott, he is accurate in this anecdote. Well, David McCormick, who later runs for Senate, is celebrating his wedding to - And is doing it again. He's doing it again. He'll do it a third time if he doesn't win this time. He's the CEO of Bridgewater at that point. So he's the number two to Ray Dalio. And he's marrying Dina Powell, who's this very famous former Trump administration official, Goldman Sachs. And Ray Dalio is throwing this wedding party at the Belhaven Club in Greenwich, Connecticut. it. And Ray gets up to give his speech. And he says, among other things, he says, David has found the best party girl in America to marry.

59:51And it's just one of those scratch the record moments. But worse than that is that David knows he can't actually tell Ray that this was not the right thing to say. Because despite all of Ray's principles about trust in truth and always talk about radical transparency, you can't actually tell Ray the hard truth. So David just steams and gets embarrassed in front of all of his family and friends. And Dina, by the way, embarrassed most of all. It's just if I made it up, it's stranger than fiction. You wouldn't believe me. Scott? So Robin, I realize I'm sounding like an apologist for Ray here. You are.

1:00:30I worked at Morgan Stanley for a couple of years, and I worked at hedge funds, you know, off and on or advising for the last 20 years. And I would say just until the last decade, the first word I would use to describe the culture was abusive. And that is, it was this testosterone-filled, abused child syndrome where I worked around the clock seven days a week. So were you. You were a genius if you were a bit of an asshole and drove people really hard. And it was just a toxic culture. How much of this, you know, in a place like Bridgewater, where people are making a shit ton of money and they could always leave, and maybe they did leave, I don't know.

1:01:13But how much of it, if any, would you assign to just the culture of finance and hedge funds? It's that culture on steroids. And I would say the big difference between that and your prior work experience is probably most of the people you were working with did not claim that if you didn't follow the principles, you weren't going to achieve a higher level version of yourself. They didn't say that you should ignore your own instincts, your own values and adopt new ones. I think that the idea that there's plenty of people in New York and San Francisco and every city on earth who are willing to put up with a lot to make money is perfectly fine.

1:01:49And that's their choice. The difference here is that he's saying you're part of the family, and it becomes very difficult to sort of leave the family even when you are sustaining this high level of abuse. You're saying a culture kind of breached into a cult. It kind of became – it went from – it almost has a bit of a Scientology feel to it. It has a big Scientology feel to it, and even one of their former employees actually tries to blow the whistle on this. He tries to tell Charlie Rose, you can't spell culture without C-U-L-T. And he gets put on trial and fired. Bridgewater is well aware of those comparisons.

1:02:27There's a sign of the differences at Bridgewater. If you're part of, if you believe it's a cult, you're also getting paid a ton of money. So Scientology is paying you pennies to toil in God knows some bunker in LA. But just to follow up on that, as the naked capitalist here, they built the largest hedge fund in the world. paid a lot of taxes, created a lot of economic security for a lot of people. I mean, doesn't that count for a lot? But does that justify? I would say just because they did that? I think that's a fair question. I don't know. I mean, these people are the most talented, some of the most talented sought after people in the world.

1:03:04If it was that bad, they could have left. These aren't people, but this isn't forced labor out of Shenzhen. It's not forced labor, no. But there are definitely some similarities to, I guess, what the lawyers would like me to call personality-based organizations. I don't believe that Morgan Stanley operates with a strict doctrine, with a charismatic leader in the woods of Connecticut, with harsh punishments to those who try to leave. Yeah, it's religious. It becomes religious. It's nonsense. It's literal nonsense. And I think tech companies, a lot of them do this. You know, some of them do it. And it's all bullshit.

1:03:37Every bit of it. You know, they break the rules that they make. And, you know, whether it's Google, don't be evil, this and that, it's just fucking nonsense. And so the very sensible people just, I'm making money. This is a tough culture. That's just the way it is. Like it or leave it. Thinking of Microsoft in the early days, just a tough culture. That's what, they didn't pretend it wasn't. But when these CEOs try to become more than, they're not satisfied with the money. They want the acclaim and they want the love and they want to be, you know, business Jesus, essentially. So many of them want to be business Jesus now.

1:04:13Again, he was wealthy beyond belief before he ever said the principles. So what he really wanted was to be loved by this larger group. And I mean, in that, I guess we could say he's probably one of the most relatable characters of all, because wouldn't we all want more than just money? There's a lot of us who are desperate for other people's affirmation, Rob. Yeah, yeah. I don't know. There's only one business Jesus, and that is my co-host, Barbara, here. That's your name. That's your new name. Fander Ross, brokenness, Jonathan, you're Barbara. Let me ask a final question. What is he doing now?

1:04:48He's supposedly retired to his monk ship or whatever, pope ship. He's really running it still, correct? Where is Bridgewater as a business? Yes, it's been a tough market. How is it doing compared to others in the sector? So the firm has shrunk a lot, but it was so large that it is still the world's largest hedge fund, so good for them. He's technically retired, but he has like three titles there. He's still trying to push to start a - he suggested starting his own fund inside there. The truth of the Ray Dalio story is that he can't ever actually really leave. He can't really admit that he is replaceable because, well, he just he refuses to.

1:05:33You know, he's just still talking this week, going to state dinners. He's embraced by the White House. So, you know, almost everyone at Bridgewater would just hope he disappears. But he seems completely temperamentally incapable of that. And is he have control over the company? He has a lot of stock. He doesn't have technical control. But I think we need to ask ourselves, who's in charge? Is it the guy with the CEO title or is the guy who at any moment could go on TV? All he has to do is say the sentence. I don't have confidence in the people running this firm. And, you know, they're in a world of pain.

1:06:06Yeah. Yeah. Scott, any last questions? What's your next project? Well, you looked at the industry. I mean, to benchmark and really have an accurate depiction here, I imagine you looked at a lot of leaders at similar companies. Are there any organizations you would contrast with Bridgewater as having really healthy cultures? Well, my next project after your questions is about Scott Galloway. That's going to be a leaflet. That's going to be a leaflet. It's called A Rectile Dysfunction, a podcast, and the Jungle Cat Kara Swisher. There's your title. That book is done. Boom. Portfolio Penguin Random House.

1:06:42That's right. I'm sorry. Go ahead. We're with Macmillan and his family. Yeah. I will say I haven't found another project that is as fun and as dark as this one. I think Netflix has a lot of similarities. I honestly, I know you guys have talked about this today. The next five years of Elon Musk, it just seems impossible that this doesn't get - It's going to Howard Hughes, like I said. We're headed to Howard Hughes. Yeah, Rob, could you move to the valley? There's just a lot of fodder that you would enjoy and probably be good at depicting. Such fucking nonsense. You know what I hate? I'll tell you, Rob, the one thing.

1:07:20Whenever I'm around some Silicon Valley people who've climbed Mount Everest, they try to equate going to Everest with business. And I'm like, okay, so dead bodies and trash at the place you shouldn't be at the top of the earth where you take advantage of labor. I was like, it has nothing. Well, it actually has a lot to do with your life here. But they always try to, you know, if you can make the peak and survive Everest, that's the same thing. I just can't with the, I've covered finance for most of my career. And something I like about finance is they often don't claim to be changing the world.

1:07:51No, they're just making money. And there's something healthy, I think, about that. And Ray is so different because he really does say it's not – he claims to hate wealth. He just happens to be worth$16 billion. So I'm looking for another figure like that. Yeah. Oh, Elon, I think is where you want to – yeah. Because it is going to end in a Howard's use, like, collapse. Is there – what's his latest attack on you? Is he just giving up or – Oh, he keeps, now he says, I just made it all up, that it's all fiction. No, I don't think you did. He can't talk about the facts because at Bridgewater, everything is recorded.

1:08:26So if he really wanted the truth out there, he could just release the recordings of everything I wrote about and people could decide. That was the creepiest, recording everything was the creepiest thing. I did interview for a job there when I was 23. And I interviewed for, I think, every job in the New York tri-state area. and he's threatened me that they recorded those interviews and have notes and they'll release them. And I can tell you, I'm sure I sound like an asshole. I was 23. I would have done anything. Well, you're clearly holding a grudge. Anyway, the book is called The Fund, Ray Dalio, Bridgewater Associates, The Unraveling of a Wall Street Legend.

1:09:03It's a great book. People should read it. And I'm sorry that he bought Google. I kind of love that he bought, he bought, Scott, you don't know this, but he bought Google keywords for an interview I did with him about principles against his book, which made me laugh. It's great. It's very funny, because if you Google me, Rob Copeland, the fund, instead you get Kara Swisher, which is an honor, but a little annoying, let's be honest. Come on. That's a good one. He got me on that. Respect. That one I love. So I bought ads at the train stations in Connecticut, all in Fairfield County, where all his employees came in.

1:09:42Oh, my God. What did they say? Oh, for the book? Yeah, it's just a quote saying - This is a war of the roses. I know, but he got me. I didn't think of Google AdWords for the next book. Yeah. Oh, well done. Oh, I got to get on that right now. I better get on that right now before Elon does stuff. Anyway, on the back of my book that's coming out, instead of, I don't like blurbs. And so, I've put all the insults of the tech leaders to me on the back. It's all their insults. Oh my gosh, I love that. Yeah. It's really good. It's really good. Anyway, Rob, thank you so much. Keep doing the great work.

1:10:15All right, Scott, one more quick break. We'll be back for wins and fails.

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1:12:07okay barbara let's hear some wins and fails i like calling you barbara this you go you go first uh um i think i guess you don't have it you're irritable but you didn't no i'm not irritable um i sat next to at a party this night um jennifer newsome uh who is married to gavin newsome uh she's a documentary filmmaker a bunch of other things she's terrific she's a terrific person um and she reminded me and i had totally forgotten this gusantis um gusantis Newsom debate is tonight. Sean Hannity is doing it. Very smart on Hannity's part, actually. I think this is a really interesting win. I think it's going to be actually good and a debate about policy and where we're going as a country.

1:12:48I'm excited about it. I am. I don't think it's going to be a silly circus. I'm more excited about this than any Republican debate so far. Yeah, I am too. I think it'll be great. They should have it out, right? In a way. I'm sure there'll be insults and this and that, but let's have some real significant. I've seen Gavin on, he's been on Hannity, did very well. And it was, and actually he made Hannity better, if you can believe it. Like it was, it was. He made Hannity more likable, I thought. Not just likable, but like, okay, let's actually stop yammering and making stupid, you know. And talk. And acknowledge points.

1:13:19Let's talk and acknowledge points. So I'm looking, I think this is going to be a win. It's a future win. It's a future win. And I think the fail is obviously Linda Iaccarino. I don't know what else to say. Elon is obviously something's wrong. And whether it's a character issue or something else, and I don't feel sorry for him in any way whatsoever, but all the enablers around him have really, someone has to step up here and say something and nobody will. And that's the fail. So there you have it. There you go. So I guess my win, very basic, is the life Charlie Munger. Oh, great guy. Died at, I think he was just about to turn 100 or was 100.

1:14:04Yeah, 99. 99. Veteran, served in World War II. And I love guys who, you know, very early on can equate investing to either biology or life. And he was, I just thought he was pithy and smart and a great, in addition to being a great investor, great storyteller. always talked about the importance of family, country. I just, I like that sort of, it's sort of a, I think he sort of marks the age and probably marks the end of an era in terms of that type of investing and a focus on, you know, life is seen through the lens of an investor. And he just seemed like he led kind of a great American life, so.

1:14:50Good guy, pleasant, good to people, you know, just lovely. There was never any two parts of this guy, right? Like we're just talking about Ray Dalry or Elon Musk or anybody else. Just a contributor. Let's just say a contributor to everything. And also, and we don't like to speak this nakedly about capitalism, but if you had invested$100 in Berkshire Hathaway when Charlie Munger joined, it would now be worth$400 ,000. And so people who use their skills to create wealth and economic security for other people deserve a tip of the hat. He created a lot of economic security for a lot of people. And also, I like the fact he was fearless and was one of the first people.

1:15:29And he took a lot of shit for this. And I didn't get nearly as much, but I could relate to the shit he was saying when he said Bitcoin and crypto was rat poison. He just straight out of the gates didn't fall into the need to try and feel young or try and feel cool and embrace it and said, this is supporting terrorism. I mean, he just came right out of the gates and said, this is just, this is awful. And I respect that he was – he didn't have a screen. He didn't have a, you know, a filter. But most everything. Simple life. Yeah. Simple life. These guys, both of them. You know, I've been out there and have met him and had dinner with Warren Buffett.

1:16:06They really – you know, they're a type of a Midwestern guy, you know, but just very – I have to say lovely. I had a lovely dinner. Simple. Just a different kind of attitude. Just not an asshole. Not an asshole. Like really quite, I don't know. There's so many. Nobody lives up to some of these people. And it's sad. It's really sad. They should try harder. Anyway, what is your fail? Well, my fail is the continued perversion of different terms in the context of the Israel and Gaza war or conflict. I don't even know the right terminology. And one of the words that has been totally perverted is this word apartheid.

1:16:47and Israel has been accused of engaging in apartheid against Gaza and the Palestinian people. And I just, the definition of apartheid is a policy or system of segregation or discrimination on grounds of race. So segregation or discrimination on grounds of race or religion, you know, what have you. And I just want to go over some numbers here because the UN had a resolution, basically using the term apartheid over and over when condemning Israel. And of course, these Arab nations all lined up and said that Israel accused Israel of being engaged in apartheid against Palestinians in Gaza. So let's just look at these Arab nations and how many Jews were there.

1:17:33In Syria, there were 40 ,000 Jews in 1948. Now there are zero. In Iran, 100 ,000 Jews in 1948. Now there are 8 ,500. In Morocco, 265 ,000. Today there are 2 ,100. In Algeria, there were 140 ,000 Jews. Now there are 200. In Tunisia, 105 ,000 in 1948, 1 ,000 today. Let's talk about today, there are 2.1 million Arabs in Israel. They serve on the Supreme Court. They own businesses. They are elected to the Knesset. Arabs in Gaza, right? There were 80 ,000 in 1948, and now there are 2 million. So, stop misusing the terms apartheid and ethnic cleansing. And the double standard here, perversion, dysmorphic view of what these terms mean, whether it's genocide or ethnic cleansing or apartheid, no one actually wants to determine or actually do the diligence of figuring out what these words actually mean and then comparing these nations and these organizations relative to Israel.

1:18:44And I find it, again, just another example of how we continue to find reasons to persecute a population that's 0.2 % of the world. and this is just another example of what I see even across the UN, across media, across a younger generation that has decided to just throw these words out without actually taking the time to get a fucking dictionary and then contrast the definition of these words against history and reality in the region. So my loss is the continued perversion of these very emotionally charged words that is nothing but thinly veiled, continued, obnoxious rot that is anti-Semitism.

1:19:29It's also ignorance, Scott. It's ignorance of history, too. I mean, I think you have to, you know, I've had some great discussions with my kids about this. And, you know, they'll take, if they will learn, you know what I mean? Like some of it, that is more complex. It's like we were talking about at the beginning, you know, like, you know, like the Biden administration's doing deals with the Saudis. okay. They condemned them before. This is the world, unfortunately. And speaking of the world, Kissinger, right? That's how it works. It's complex. And that's what it's hard for young people to see the complexity of things, I think.

1:20:02Okay, Barbara, thank you so much. We want to hear from you. Send us your questions about business tech or whatever's on your mind. Go to nymag.com slash pivot to submit a question for the show or call 855-51-PIVOT. Okay, Scott, that's the show. We'll be back on Tuesday with more Pivots. We're also busy taping holiday episodes that you'll really like. And we've got more to come. Scott, read us out. Today's show is produced by Lara Naiman, Zoe Marcus, and Taylor Griffin. Ernie and her tot engineered this episode. Thanks also to Drew Burrows, Mille Saverio, and Gaddy McBain. Make sure you subscribe to the show wherever you listen to podcasts.

1:20:35Thanks for listening to Pivot from New York Magazine and Vox Media. We'll be back next week for another breakdown of all things tech and business. Cara, have a great rest of the week and weekend.

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