Women’s Soccer Investing, AI Disruption & Global Trends ft. Daniel Altman | Navigating Wealth
We spoke to Daniel Altman on this week’s episode of Navigating Wealth. Dan is a Harvard-trained economist, founder, and bestselling author who’s written for The Economist, The New York Times, The New Yorker, and Foreign Policy, advised the British government, and built a second career in professional sports investing.
In this conversation, Dan walks through how he structures sports investments (including a Canadian women’s soccer club), what generative AI might actually do to white-collar work, and why he thinks U.S. investors need to pay more attention to currency moves and foreign direct investment.
We also went deep on: how to turn the principal–agent problem in real estate to your advantage, why MLS club valuations might be frothy, what his Baseline Profitability Index says about where to invest globally, and how high debt-to-GDP ratios could flow through into inflation, gold, and the dollar.
Key Ideas from This Episode
Guest Snapshot
Name: Daniel Altman
Titles: Economist, founder, investor
Credentials: PhD in economics from Harvard; former economics correspondent at The Economist and columnist at The New York Times; economic advisor in the British government; adjunct professor at NYU Stern.
Current focus: Author of the High Yield Economics newsletter and creator of the Baseline Profitability Index, a tool for evaluating foreign direct investment opportunities around the world.
Additional areas of expertise: Professional sports analytics and club investing, early-stage investing in “unsexy” billion-dollar platform opportunities, and building a jazz performance space in Englewood, NJ.
How Dan Hacks the Principal–Agent Problem in Real Estate
The episode opens with Dan explaining why the standard realtor commission model can create misaligned incentives: the seller thinks they’re paying for top-dollar execution while the agent may, rationally, try to close quickly and move on to the next listing.
He shares two practical hacks to realign incentives and negotiate a lower commission rate, particularly on multi-million dollar homes:
1). Use a “rebate agent” as a buyer.
When Dan bought his current house, he used a boutique rebate agent whose base fee was $10,000 and passed the rest of the commission back to him. Dan did the search and most of the work himself; the agent stepped in at the end to capture and rebate the commission.
2). Exploit the commission split in competitive bids.
In a multi-bid situation, he shared his experince coming in without his own agent, so that if his offer wins, the seller’s agent keeps the full commission. That puts him “in pole position” relative to other buyers whose agents would require a split. He’s effectively co-opted the seller’s agent to also want his bid to win.
Dan notes that this whole incentive structure is a classic principal–agent problem—so much so that he’s writing about it in his upcoming book, Economics for the Win, which focuses on using economic tools to make better everyday decisions.
From Harvard Economist to Sports Investor
Dan’s career path is unusually non-linear for an economist, and that breadth is part of what makes his perspective so valuable to founders and investors. He went straight from his undergraduate degree into a PhD in economics at Harvard, where he even taught Tad in Principles of Economics. Instead of pursuing a traditional academic trajectory, he left the tenure track entirely and became the economics correspondent at The Economist in London. From there, he joined The New York Times, first on the editorial board and later in the newsroom as an economics writer.
After journalism, Dan moved into a series of roles that further expanded his view of how economies function in the real world. He served as an economic advisor in the British government, worked in global development consulting at Dalberg, and spent roughly a decade as an adjunct professor at NYU Stern. There, he taught courses ranging from macroeconomic forecasting to the role of private enterprise in poverty reduction to the emerging field of sports analytics.
Eventually, Dan made a significant pivot into professional sports. He began doing moneyball-style analytics for organizations such as City Football Group—the owners of Manchester City and several other clubs—as well as Premier League and MLS teams and U.S. Olympic programs in volleyball and weightlifting. He also built and later exited an online soccer scouting platform. Along the way, he and a partner began buying stakes in clubs, including a particularly successful English investment that more than doubled their money in just a couple of years.
All of these experiences inform Dan’s framework for investing in sports. He doesn’t approach clubs as a fan with a checkbook. He approaches them as an economist—analyzing cash flows, media economics, optionality, and the value created by promotion within league systems.
Why Women’s Soccer Is a Live-Content Goldmine
One of the most actionable parts of the conversation for people interested in alternative assets is Dan’s breakdown of women’s soccer as an investment.
He and his partner are investors in a club in the new Canadian women’s professional league. They see two big drivers:
Live content is the “emperor.” Streaming platforms can buy scripted shows from lots of places; what differentiates them is live content. Soccer has already proven itself as premium live content globally, and the appetite for women’s sports specifically is now “growing strongly” as well.
Relatability and story-driven fandom. Women’s soccer benefits from a huge existing base of girls who play, a long-dominant U.S. national team, and national teams like Canada that rank in the global top 5–10—but until recently, there was no domestic professional pathway or week-in, week-out league to follow. Dan frames this as “low-hanging fruit” finally being picked: the talent, fandom, and international prestige were all there; the domestic leagues were not.
He contrasts that with something like pickleball: lots of participation, real relatability, but no established culture of watching matches—so building a serious media rights business is much more speculative.
The Business Model Behind Buying Soccer Clubs
Dan also walks through several concrete ways that investors can make money in soccer, starting with what he calls the classic private equity-style “promotion play.” In their English club investment, he and his partner bought a third-division team with the intention of getting it promoted to the second division—the Championship—within five to seven years. Promotion alone would immediately increase the club’s broadcast revenues, and it would also move the team into a tier where ultra-wealthy buyers are more likely to pay a premium for an asset they believe they can push toward the Premier League.
He then explains the broader media economics that drive these valuations—and the risks that come with them. Moving up a division increases a club’s media revenue substantially. The Championship’s broadcast deals are far richer than those in League One, and the Premier League operates at an entirely different level.
Dan remains cautious about investing in MLS. He notes that some MLS teams now have enterprise values higher than storied European clubs such as Ajax or Milan. In his view, that pricing reflects a mix of extremely valuable stadium real estate, municipally subsidized facilities worth hundreds of millions of dollars, and investor belief that soccer will eventually become as large as football or baseball in the United States. The result is what he views as frothy valuations—stakes are expensive even in some second- and third-division U.S. clubs—so he has chosen to stay on the sidelines.
What Gen AI Really Means for Blue-Collar vs White-Collar Work
Dan’s experience as the chief economist at Instawork, a marketplace for in-person hourly work, shapes the way he thinks about generative AI. He makes a clear distinction between types of jobs and how exposed they are to automation. In his view, “standing jobs” are largely insulated. Instawork already uses AI to help match workers to shifts and reduce friction across the marketplace, but generative AI itself is not going to load pallets, serve catered meals, or perform other forms of physical, in-person labor. AI might offer useful tools around these jobs, but it is not a substitute for them.
Where Dan sees real vulnerability is in a broad band of white-collar roles. He notes research showing that about half of consumer spending comes from a relatively small group of high-income households. The people at the very top may be able to use AI as leverage, but he worries about what he calls the “middle swath” of high-income sitting and white-collar workers, whose tasks may be more directly automatable.
To make sense of what could happen next, Dan draws a parallel to the last 30 to 40 years of globalization and technological change. During that period, blue-collar workers were often the ones displaced, and many countries—particularly the United States—did not offer effective retraining or support during those transitions. He believes that the political environment today reflects the consequences of that failure, with large groups of people feeling left out and frustrated.
His concern is that the same pattern could repeat, but this time with white-collar workers. As he puts it, “What if we had that again, but this time with those white collar workers? … I shudder to think what our politics would look like then.”
Because of this, Dan argues that the United States needs something akin to a modern GI Bill for people affected by technological and trade shocks. He points out that the U.S. has what he describes as a “terrible market for training,” where companies have little incentive to invest in workers who can easily leave or be let go, and where there is no robust apprenticeship system comparable to countries like Germany.
Are We in a New Gilded Age? Debt, Inflation, and the Dollar
When the conversation turns to macroeconomic trends, Dan reaches for historical parallels to make sense of the current moment. He says that aspects of today’s U.S. economy remind him of the Gilded Age, a period when a small group of people became extraordinarily wealthy and closely connected to government, while many others experienced stagnant or declining living standards. Historically, he notes, this combination has led to revolution in some countries and, in the United States, to intense political backlash and major reforms.
He also makes a more provocative comparison between the United States today and Argentina during the Peronist years, drawing specifically on the period under Cristina Kirchner. The policies experienced during that time period—such as high tariffs, large fiscal deficits, taxes on exports, government involvement in companies, and the threat of currency devaluation—feel familiar to him when he looks at aspects of U.S. economic policy now.
These analogies lead Dan into a discussion of the Baseline Profitability Index (BPI), the tool he developed to assess the attractiveness of foreign direct investment in different countries. The index pulls together public data on factors such as economic growth, the risk of expropriation, corruption, capital controls, past financial crises, insecurity, and real exchange rate risk. Some countries, including Singapore and parts of Scandinavia, tend to perform well on governance and safety measures. Others—such as India, several African markets, and some Eastern European countries—can rank highly once their expected real exchange rate appreciation is taken into account. By contrast, Dan notes that the United States currently lands somewhere in the middle of the pack on his index.
From there, he explains why currency exposure matters more than many U.S. investors assume. He points out that Americans once held roughly 90 percent of their portfolios in U.S. assets, but that figure has fallen closer to 60 percent. As an example of how currency moves can affect returns, he describes buying German government bonds to gain exposure to the euro. Because the dollar has weakened by about 10 to 15 percent against the euro this year, that foreign-exchange move alone has produced returns similar to the S&P 500, in addition to the bonds’ yield. He also notes that roughly 10 to 11 percent of U.S. consumer spending goes toward imports—not only luxury goods but also everyday items like clothing. When the dollar depreciates, Americans effectively become poorer in global terms, even if their domestic portfolios look healthy.
Dan adds that, in his view, gold has outperformed U.S. markets since the Great Recession. He ties this to the high debt-to-GDP ratios seen across many major economies—levels he identifies as being above 100 percent—which he believes are driving investors toward inflation hedges such as gold, real estate, and certain currencies like the Swiss franc.
For him, the overall message is straightforward: for high-net-worth U.S. investors, ignoring foreign direct investment and currency exposure is no longer as low-risk—or as harmless—as it once seemed.
Other Quotes Worth Sitting With
A few lines that capture Dan’s worldview:
“Content is king and live content is really the emperor.” (on why live sports sit at the top of the media food chain)
“We bought a third division team thinking if we could get it to the second division, then we would have a three X or four X on our hands easily.” (on treating promotion like a PE play)
“Generative AI is not going to load a pallet for you.” (on why standing jobs are insulated from gen AI)
“We are going to get poorer as Americans because of the depreciation of the dollar. We can’t avoid that.” (on currency moves showing up in real life)
“I’m always looking for companies that do things that are kind of unsexy and yet have the possibility to grow into a billion dollar platform.” (on his early-stage investing lens)
Links You Might Find Valuable
All of these came up directly in the episode:
Join Long Angle Community - A private, vetted community of accomplished wealth builders.
High Yield Economics – Dan’s free weekly economics newsletter on LinkedIn.
Baseline Profitability Index – Dan’s tool for evaluating foreign direct investment opportunities across countries.
Gross Domestic Provocation – Dan’s new podcast with hedge fund investor Jason Freeman and marketing operator Jeremy Hudson, unpacking what economic news means for real people.
Economics for the Win: Practical Principles to Help with 30 Life Decisions – Dan’s upcoming book.
Full Transcript
[00:02.892] Matt Shechtman: All right. Welcome to the Navigating Wealth podcast from Long Angle. Each week we invite a guest who combines a fascinating career journey with deep subject matter expertise in an area of business, investing, personal finance or lifestyle. I'm one of your hosts, Matt Schechman.
[00:17.726] Tad Fallows: tadfellas.
[00:19.127] Sriram Gollapalli: Hi, I'm Streer, I'm Galapally.
[00:21.426] Tad Fallows: And we're thrilled to have Dan Altman join us today. Dan's the author of the High Yield Economics newsletter and the Baseline Profitability Index, which is a tool for evaluating the attractiveness of investing in markets around the world. Earlier in his career, Dan was the chief economist at Instawork and has worked extensively in the world of professional sports investing. He's also written on economics investing for publications, including The Economist, The New York Times, The New Yorker, and Foreign Policy. and earlier in his career served as the economic advisor for the British government. So welcome, Dan. Thank you for joining us here.
[00:55.898] Dan Altman: Thanks very much, Tad. It's pleasure to be with you guys. I wasn't the only economic advisor in British government, but I was one of them.
[01:02.314] Tad Fallows: Your most important one. So typically what we do for the first five minutes or so here, we'll cover one of the most popular, one of the most we think interesting threads from long angle over the past week. So this week there is an interesting one on realtor commissions. And as an economist, I'm sure you've got some strong perspectives on this one, Dan, with I would say traditional quote standard market rates for commissions being somewhere in the five to 6%.
nominally coming from the seller and split 50-50 between the the buyer and the seller's agent and I think really the fundamental question here is a lot of people are asking hey If house prices now or let's say I'm looking to sell a house for five or eight million dollars Five or six percent of that just seems like a crazy price And you know, I think there's a lot of discussion about hey, what are people actually spending on that? So I'm happy to kind of share my experience. I recently bought a house end of last year and
really like the broker I work with. And I think there's real value to a broker who really knows the market deeply, especially if it's one that's a little more idiosyncratic, not just, this is one condo out of 300 in this building, and there's clear market clearing price, but some of those dynamics. I ended up just telling her that, you know, given the price point was a lot higher, that, you know, we felt 1.5 % was fair for the buyer's agent. And I wanted her to rebate anything over 1.5. And while she wasn't happy with it, you know, ended up doing it. And I think she did just as credible a job as she would have paying
And so I felt like a little bit of a jerk on the negotiation, but seemed well worth it I don't know if you guys have had any experience in this world
[02:34.116] Dan Altman: Yeah, I do. Actually, the house that we live in right now, I bought using a rebate agent. So that's specifically an agent who does rebate the commission. pay very little or they play very little part in the buying process. You identify the house you want yourself. If you want them to visit it with you, they will. But essentially, if you want to get the maximum rebate, then they're just there at the end. And that process worked out great. There are so many tools right now for finding the house you want.
online. And so I didn't really feel like I needed a real estate agent to help with the search. I've done a lot of property transactions before, so I didn't feel like I really needed someone to help with the paperwork part of it. I just needed somebody to stand there and take half the commission from the seller's agent and pass that back along to me. The thing is, there really isn't the same thing on the seller's side. And yet we still have a lot of selling tools to make it easy. And now, in fact, you can list yourself on some of the bigger websites.
So I think there's maybe a gap in the market there where we could have sellers agents that are offering consistently lower commissions and spending less time on it. Because after all, if you're a seller's agent, you just want to get that transaction done and go on to the next one, right? You don't even have a good incentive to negotiate. There's a big principal agent problem there in the first place. So I think that there's a gap in the market and we might see seller's agents doing what rebate agents do for buyers.
[03:59.382] Matt Shechtman: And Dan, who'd you use? Did you use a boutique agent or was that a Redfin type situation?
[04:05.038] Dan Altman: Yeah, she's a boutique agent who operates in the New York Tri-State area and was great.
[04:12.007] Tad Fallows: And what does that end up costing for somebody? that a few thousand dollars or what's the net out of pocket?
[04:18.458] Dan Altman: Yeah, I mean, her base was $10,000 and the rest passed on to me.
[04:24.941] Matt Shechtman: I'm surprised that we haven't seen more traction. mean, whether it's after the settlement, you know, where court basically found, you know, collusion amongst the club deals and all the realtors out there. But even before that, you know, I don't really know what it would take to really pick up steam in terms of market share for Redfin or other type of agents. Maybe we need to run the numbers and it is picking up steam and it's just a matter of time.
I don't know what others think on that in terms of it actually happening. When we talk to people that are going through it, I think that there's a significant level of concern for those that don't have a lot of real estate transactions in their belt or maybe don't have a lot of financial experience. It's just a huge purchase and everyone that they've ever known has used a 6 % or split-based broker for the last couple decades. And I think it's probably a level of just that fear associated with it.
[05:24.036] Dan Altman: Yeah, but you know the most important thing for a buyer is really the attorney, right? If you have a good real estate attorney, they're going to make sure that you're protected and that all the contract and title information is as it should be. You know, the broker is much less important, I think. And there are some online businesses now that are trying to do the rebate broker thing at scale. So it may be growing.
[05:46.09] Tad Fallows: You know, your point around the information is interesting is I've been following this Compass Redfin lawsuit. And I think, you know, typically I'm kind of one of these, hey, there's two sides to this story, et cetera. It seems to me that what. OK, so this is, you know, Compass, they are a real estate brokerage firm that started a few years ago. think they initially position themselves as a tech company and when really it was just, you know, another real estate brokerage, but got a lot of money from SoftBank to build brokerage. I think they're now the biggest brokerage in the country and they have this
[05:57.634] Matt Shechtman: Wait, what's the background there, Todd?
[06:15.443] Tad Fallows: thing where you can list your house just on their internal platform initially, and it doesn't go on the MLS. So basically doesn't start ticking on your days on market. So the kind of pitch to the seller and actually worked with my sold one house, a compass agent, and it was handy for the sellers. Okay. You can kind of test the market here, see what the feedback looks like. You don't start to make the house look stale. And then Redfin has basically, I think, been looking around the corner and saying, Hey, this is going to blow up our whole business model or sorry, Zillow rather saying,
If we start to lose the MLS is cohesion, you get this fragmentation. Then all of a sudden, you know, there's not a single source of truth, which I think is what it looks like in a lot of markets. You know, occasionally when I daydream about having a place in Paris, I'll try and browse Paris apartments and there is no kind of universal way to search. and then I think, you know, compass is now buying, open door, so they'll get, you know, even more scale there. So I think it's basically, a big fight between the two of them about.
What Zillow is trying to do is say, hey, if you ever list on something else and don't put in the MLS within 48 hours or 24 hours, then we're never going to show it on Zillow and trying to use their market power to sort of force people to continue in the MLS. But then I think Compass is trying to use their market power, say, no, you know, we're big enough that we don't have to participate. Personally, I'm really on Zillow's side here because I think that you could use, I think we have a very good shared data infrastructure which enables people to do things like Nan did in terms of just negotiating down the price. But if you start to get that fragmentation, now you got to go to a
you know, Berkshire Hathaway agent and a Compass agent or whatever agent to get a full picture. It's just a kind of deadweight loss in the economy from my perspective.
[07:51.106] Matt Shechtman: Yeah, I don't know. mean, that shared infrastructure is also what created the like collusion amongst brokers and the whole MLS system in the first place that caused the lawsuit that just happened the past years. Because what was it if you're not going through the MLS, then you'd have buyers, brokers refusing to show or sellers, brokers refusing to work with non affiliated parties, non realtor affiliated parties. Yeah, I don't know. The infrastructure can be
a boon and a bear at the same time.
[08:23.959] Sriram Gollapalli: Yeah, I think there's also this aspect of this off market transactions that happens in especially the desirable areas. So I think people are going around these things anyway. Right. So the question is, is that going to be something that's easier? Do you want to facilitate those things or are they just kind of because they're not posting on MLS and you like it sold within 30 minutes of being listed? Well, clearly there was another market behind it. So if it's already happening anyway, is it better to kind of bring try to bring more transparency there?
and almost
[08:54.189] Matt Shechtman: Well, who do you think is facilitating that though? My impression is that those are pocket listings that are held by brokers and it's just, hey, great, we never have to take this to market at all. But my buddy who's on the buyer side, I just connected them and then now we did this without even going through the listing process. My problem on that, like on those types of things is that from a seller's side, they're like, they're told that they're getting top dollar and that they never have to do any work. But you know, the agents...
incentive is to just sell this thing as fast as possible, right? And I'm not sure that you're actually getting market dynamics on those types of things. But I agree with you. see that stuff happen all the time.
[09:33.198] Dan Altman: Yeah, that's a big problem, the incentive problem. And I'm actually writing about it in the book that I have coming out next year, which is called Economics for the Win. It's all about using economic tools to make better decisions in everyday life. And if you're selling, you need to come up with some other arrangement besides just a commission. So you can align the incentives between the agent and yourself. You want to say, hey, if you get a price above this number, then I'll give you 50 percent instead of 6 percent or 3 percent or whatever it is.
You know, that way their incentives are much more aligned with yours. If you set that number high enough, then I think you'll be happy with that arrangement. But generally speaking, it's a problem. I even was able to turn the principal agent problem to my advantage once as a buyer by saying, OK, I'm coming into a transaction for a property I want where I know there are multiple bidders and I'm coming without my own agent. So that means that the seller's agent, if I buy, gets to keep the whole commission.
So all of a sudden, I'm in pole position in front of those other buyers who have their own agents, right? Now that agent's working for me as well as for the seller. I've co-opted them. And so this principal agent problem can be turned both ways, especially when the commission's big.
[10:43.997] Tad Fallows: And do you find it's better to do that of saying, I'm going to self-represent? I found they like it better when you just go to the seller's agent and say, I will hire you as mine as well. Because I find the self-represent seems to give them the heebie-jeebies for some reason, either like they're going to get a bad reputation among their peers, or they think that you're going to be a clown, not know what you're doing. But if you explicitly hire them, you kind of accomplish the same thing.
[10:44.458] Matt Shechtman: Yeah, I did.
[11:08.841] Tad Fallows: So I think, you know, having jumped in here, would love to kind of go a little bit broader on your background, Dan. So do you mind giving us a quick walkthrough of your career here?
[11:22.266] Dan Altman: Sure. Well, after I finished my undergrad, I went straight into grad school for economics where I had the pleasure of teaching TAD, Principles of Economics. So I finished my PhD at Harvard. And then after that, I decided I didn't really want to go the academic route right away. I think I kind of didn't want to spend the rest of my 20s and my early 30s working 16 hours a day to get tenure. And so I actually went to The Economist as their economics correspondent based in London and editor of the statistics section there.
I did that for a year and then I got hired by the New York Times onto the editorial board and then later went to the newsroom writing economic commentary. I went back to London to work as an economic advisor in the British government. Then I went back to the New York Times organization as an economics columnist, global economics, as well as US economics. And after that, along the way, I'd written a couple of books. I decided I wanted to be a bit more of a doer rather than a reporter, a writer, a commenter.
And I went into consulting and international development for a couple of years with a firm called Dahlberg that has offices around the world. And then I kind of thought after 15 years, I wanted to get out of the regular economics business. And I went into sports. I got a bunch of sports data from soccer, started playing around with it and doing a little consulting for big groups like City Football Group, which owns multiple clubs in the Premier League, MLS and many other leagues around the world.
I worked for other Premier League teams and MLS teams here in the United States. I did some work with US Olympic teams in volleyball and weightlifting for several years. Just a lot of sort of moneyball type sports data consulting. And after that, I started my own business for an online scouting platform for soccer, which I ran for a few years and then sold. And I also started investing in soccer clubs. So I do that with a business partner based here in New York.
And we had a very successful investment in England where we doubled our money and a little bit more in just a couple of years. And right now we have invested in the new women's soccer league in Canada, which just started this season. And we are both investors in the Calgary club there. I do other early stage investing, many different sectors, some sports related, some not. I'm always looking for companies that do things that are.
[13:42.628] Dan Altman: kind of unsexy and yet have the possibility to grow into a billion dollar platform. And that's really what I'm doing right now. I have one more project which I mentioned offline, which is I bought a building recently to turn into a jazz performance space locally here. And I'm really excited to get that off the ground, too.
[14:02.089] Tad Fallows: Well, a lot to dig into there. I'm curious on the, you know, maybe to start in a particular place on the sports investing. I know we've had a few, we looked at this probably more in the mainstream sports, like, you know, NBA, NFL kind of investing where there are certain dynamics largely around, you know, TV revenue and that sort of thing. And what's been interesting there is they've sort of moved from these novelty investments where it's cool for the local car dealer to own one to stuff that really has strong economic fundamentals and cashflow, et cetera. It sounds like what you're working on is maybe
not as, I'm sure not as expensive, a little bit more secondary or tertiary kind of markets. What are some of the things you see driving the potential returns in something like Canadian women's soccer?
[14:43.832] Dan Altman: A lot of it is just live content. Content is king and live content is really the emperor. If you look across all the streaming services, the things that distinguish them are not just the shows, but the live content that they can offer. That's something that can't easily be replaced. That's something that always has an audience. And the appetite for that, for soccer, was growing strongly for several years. And now for women's sports, it's growing strongly as well.
So we think that women's soccer is a great nexus for that. And I think the other thing that drives it is the relatability. You have people who are there, athletes on the field, and people can connect with them through social media and otherwise, connect with their stories. And that really is a different kind of organization from what so many of us are used to investing in. It's more like an entertainment business where the personalities are the drivers.
[15:41.004] Matt Shechtman: What kind of tools are you using in order to kind of see what the forward looking growth or watchability of something is versus relatability? know, mean, women's sports is a good example for a long time of trying to build up the WNBA or other women's sports leagues. And there are certain women's sports that do phenomenally well, like women's soccer or tennis, but others that maybe don't pick up steam or then, you know, I was having this conversation the other day with a member.
about pickleball and they've had all kinds of issues with building out those leagues in that there's really no media behind it, which is where all the money comes from. But the relatability factor is huge. And so the question kind of becomes like, does anybody want to watch this? Everybody wants to play it, but is there anything behind watching it? So how do you think about that? What kind of tools are you using? I know you're getting into the data and all those types of things, but we'd love to hear more on that.
[16:37.348] Dan Altman: It's partly a cultural thing and it's partly how much groundwork has already been done. Women's soccer has been thriving in many countries for years. And the fact that it's just kind of taken off more recently in the United States is almost a historical accident. mean, the United States has been a powerhouse in women's soccer at the international level for many years. And I think there was that market just waiting to be tapped.
We always had lots of girls playing soccer, but there wasn't a professional pathway for them and they didn't really have those role models to look up to except on the national team, which you would see in the World Cup every four years or something like that. So that was really an opportunity that was just waiting for someone to grab it with both hands. And I think that the same is true in Canada. Canada is a top five or top 10 women's soccer country, never had its own league. So in some respects, it's kind of low hanging fruit.
those sports that don't have as much of an established background. People weren't used to watching men's pickleball, let alone women's pickleball, right? It's something that has to be brought into the public consciousness. I think things like the Willem Dafoe, Micolob Ultra commercials are probably helping to do that, but nobody's watching those tournaments yet. You have to wonder, are there tennis fans who would like to watch pickleball tournaments, something like that? We didn't have to ask those questions with soccer.
[18:02.455] Sriram Gollapalli: Although it's interesting with pickleball, you can like Agassi, Steffi Graf and McEnroe, they're all over YouTube playing pickleball and they're really fun to watch actually, if you ever see those. On the soccer side, I went to one of my first DC United games here in DC and it was interesting. The ticket prices were incredibly expensive. Why? Because they were playing Miami and everyone said Messi is gonna be there.
About 12 hours before the game started he claimed or claimed he had an injury and he actually didn't come and ticket prices fell like they fell almost 90 % like thousand dollar tickets were going for $100 tickets and everything else like that and It was still a great game. It was a fantastic venue down here in Audi field Recommended everyone checking it out. My question is more around you know both with like the the men's soccer team, which is you know, the men's league I should say MLS and then
A corollary question around the World Cup coming in next year, actually. I've heard stories like, well, I'm not sure we're actually going to sell out stadiums in the US and it'll be really easy to get tickets like the day before or the week before because it's really not as popular as anything else in the country. And curious on your outlook on, I guess, you know, the men's leagues or just soccer in general in the United States and why you're not investing here yet.
[19:19.618] Dan Altman: A fun fact, I used to work for the ownership group that owns DC United. And when Audi Stadium opened, we really thought we had to have some star power, especially since the team wasn't doing that well. And it was my analytics that underpinned the signing of Wayne Rooney, who came in and really, really brought a different level to that club. I can't vouch for anything else that's happened at that club, but that was one thing I was glad about. Anyway,
[19:36.204] Sriram Gollapalli: Yeah, Wayne Rooney, yeah.
I did.
[19:49.754] Dan Altman: know, soccer in the United States is in a weird place because if you look at the enterprise value of some of these clubs, they are bigger than some of the biggest clubs in Europe. You historically important clubs like Ajax and Amsterdam or Milan don't have the same value as say a DC United. And there are two reasons for that. One is the stadiums here are built on these extremely expensive pieces of land or very valuable pieces of land.
that are sometimes just seeded by the municipalities, but they're worth hundreds of millions of dollars by themselves. And there's just this expectation that soccer is eventually going to blow up in the United States and be as big as baseball or football or something like that. And a lot of those valuations are just built on those expectations. That's a lot to hang your hat on. And stakes in these MLS clubs are very expensive. Even some of the second and third division clubs are getting expensive now.
That's just something where we thought there was a bit of froth and we weren't ready to go into that.
[20:49.474] Sriram Gollapalli: I see.
[20:53.821] Tad Fallows: You know, I'm curious, it's clear to me if I could own an NFL franchise, it's just a license to print money and that's great. How much, the kind of stuff you're investing in that I would imagine is nowhere near that order of magnitude yet on revenue. Is it sort of like venture investing of, these things are currently unprofitable, but you're getting a lotto ticket. And if it turns out that this league suddenly, you I don't know, maybe you buy a third tier British team and if they can get promoted and now they're in the premier league, you're getting this 10X return. Is that the dynamic or are these things?
profitable, but just at a much smaller scale.
[21:25.082] Dan Altman: So there are a few different business models you can look at. One is this idea of promotion. As you said, in European soccer system, you can move up a league and that really increases your revenue. That's what we were looking to do with our investment in English soccer. We bought a third division team thinking if we could get it to the second division, then we would have a three X or four X on our hands easily. And we wanted to do that within sort of a five to seven year timeframe, kind of classic private equity play.
We weren't able to do that because there was a corrupt CEO and some board members who were implicated as well. So we got out of there, but we were able to get out of there, as I said earlier, at a very good price, quite a lot earlier in the process than we thought we were going to. But that's a decent play. Like that's something you could try. Yes.
[22:11.038] Matt Shechtman: Now, Dan, the returns on that is driven by you. Once you get promoted, you have better media profit shares. And so your just revenues are driven or is it multiple expansion or maybe there aren't even multiples attached to it at all. You have a Saudi prince who wants to buy any team that's in, you know, the premier versus the lower tier. And so once you get in there, then, you know, it's a greater's fools kind of situation.
[22:36.602] Dan Altman: It's a combination of stuff. Definitely the broadcast is way higher in the second division, which is called the championship, than in the third division, which is called League One. But there's also the possibility then that you could take a second division team and bring it to the Premier League, which has a lot of prestige attached to it. So yes, you're getting a big boost in revenue right away, but you're also getting that possibility that some big wealthy person is going to come in and say, hey, I want to have a Premier League team. I'm going to take this team and bring it up one more level.
So both of those could be the case.
[23:11.614] Tad Fallows: And how did you get into this sports investing?
[23:16.238] Dan Altman: Well, having worked around the sport and inside the sport for about six or seven years, I had some connections built up. know, agents in professional soccer deal with players, but they also deal with buying and selling clubs. So people start to bring you deals and you get better and better trying to analyze the books of these clubs and see what their prospects might be. We probably looked at dozens of clubs over several years.
trying to figure out what these deals might be. I did some cold calls too. That's where this investment that we're talking about came from. Actually was after we looked at clubs and decided which ones were good targets based on their catchment areas and the types of players that they had, the types of prospects that they had. I actually just cold called the chairman of this club. He initially said no, but he came back a little while later and said, hey, I'm going to sell my shares. Do you guys want to take them?
you just have to kind of get in the game and be part of those conversations. But once we did one deal, deals started coming to us on a regular basis.
[24:24.336] Tad Fallows: And, you know, in terms of your, your career path there to rewind a little bit going from academia, you know, PhD at Harvard to journalism, then to actually active investing yourself and some seems like a bit of back and forth here. Has it been, you know, easy for you to move across disciplines there or particularly from academia? Is it sort of a one way ratchet of, if you've left the academy, you know, you're, you're not welcome back. And now you're, you're a pop economist rather than a true economist.
[24:51.674] Dan Altman: That's a great question. You I did go back. I taught it as an adjunct at the Stern School Business at NYU for about 10 years, starting in 2009. I taught global macroeconomic forecasting. I taught the role of the private sector in poverty reduction, and I taught some sports analytics as well. I certainly felt like I could do decent job in those things, but I haven't really sought to get back into an economic department, so I don't know how hard or easy that would be. I'd have to start publishing.
papers and peer-reviewed journals for that, I'm pretty sure. But different stops that I had along the way, I spent two and a half years as chief economist at InstaWork, like you mentioned, and that was great for learning about the tech sector and startup funding. And I've been able to invest in a couple of tech startups as a result of what I learned there. So it's been good to have a very...
a very varied career because it means I have perspective on a lot of different businesses.
[25:51.25] Tad Fallows: Yeah, can you tell us a little bit about your time at Insta work? Maybe what you learned there that the rest of us not working there might find surprising.
[25:59.022] Dan Altman: Yeah, it's a very interesting company. It's a labor market platform. So it's a marketplace company. And most marketplace companies are kind of natural monopolies, right? You want to have a big company that has a big marketplace with lots of buyers and sellers. And the more buyers and sellers you get, the more valuable that marketplace becomes for both the buyers and the sellers. And obviously, the bigger the company can grow. So this is a labor marketplace for in-person hourly work.
And yeah, you know, it is growing to become essentially the 800 pound gorilla of that market. And it makes sense, right, because you want to have the most options, whether you're a buyer or seller of labor and learning about how to get that flywheel going in a marketplace business was very interesting. It was also interesting to learn about what kinds of benchmarks and targets a company like that needed to hit to satisfy its venture capital investors. It was also interesting to see
what the processes were for growth, how people tried to grow quickly and not worrying too much about details to imbibe a little bit of that Silicon Valley mindset, which you see Elon Musk even bringing to Washington. You see what the limitations of that mindset might be. But also to get a taste for the funding climate and also this process of what Cory Doctorow has called en-shitification, which
gradually happens with a lot of platforms when they try to exploit both sides of their market to the hilt in order to gain revenue. But it gave me some economic insights too, because it was a company that really grew during the pandemic when there were a lot of labor shortfalls. They were able to fill those shortfalls and also provide income to the workers during that difficult time. And I think we may be heading for another time like that now because we are shrinking the labor force essentially by
deporting a lot of people and scaring people from migrating here. And we're also in a situation where this wave of new tariffs is trying to spur manufacturing in the United States. So we're going to be looking for a lot of kind of low to middle income wage earners and a company like Instawork is probably the kind of company that can help to fill those gaps.
[28:13.603] Sriram Gollapalli: It's interesting actually, Dan, and what I thought you were about to say was more about the impact of generative AI on the entry level labor force. I don't know how much of that you saw while Insta work or commentary you can have. I know you just wrote about something around this just a few days ago, but the impact that's going to have or is having, I should say, on this entry level work.
[28:33.4] Dan Altman: Well, we saw that at our level too, because there was a big push within the company to get artificial intelligence incorporated into what we did. We already were using a lot of artificial intelligence for matching workers with jobs. And that's a really valuable thing to do in the marketplace to reduce frictions in a job market. In terms of generative AI, for these in-person jobs, which some people would call standing jobs or blue collar jobs, it's really not a big deal.
Generative AI is not going to load a pallet for you, right? Generative AI is not going to serve a catered meal for you. There are a few little things that it could do to help you out along the edges of those jobs, but all these jobs where people have to stand and use their hands, generative AI is not a big factor.
[29:21.329] Matt Shechtman: At least until the robots come for us, right? But I guess my my question, especially for someone who's an economist that also has such a deep investing background, which is pretty rare, is what happens when the white collar labor has a massive hit to unemployment and kind of what are the fallout effects of that first second order when
You you look at the NASDAQ and the S &P, that's just ripping and it's based on, you know, this forward looking productivity. Maybe it's too quaint or simple of a way to look at it. But when you have such a big piece of the economy that's spending on all of this, essentially your upper class segment of the economy that makes up the bulk of spending.
what happens when they're not spending anymore? Like how does that play into the overall economic cycle tied into generative AI and what's kind of fueling this bull market?
[30:28.218] Dan Altman: Yeah, there was a report out from Moody's Analytics not long ago that showed something like 50 % of consumer spending was coming from a tiny percentage of high income people. I don't know if those people are really gonna suffer that much from GEN.ai. They probably are in a better position to take advantage of it in some ways. But there is this middle swath of sort of high income sitting workers or white collar workers who are finding that some of their jobs may be at risk. you know,
I don't think there's something that's going to happen overnight. If you look at the way gen AI has spread, it hasn't really integrated itself into the workplace in a manner different from previous technologies. It's a kind of slow revolution like some of these other things. But I think that there is a risk. And to understand this risk, I think we need to look back over the last 30, 40 years to what happened with globalization and technological change. As a result of globalization and technological change, a lot of those
blue collar jobs disappeared. And that was a huge dislocation in our economy and other economies around the world that we didn't really manage. We didn't do a great job of helping those people to maintain high incomes and to deal with the forces of globalization that were displacing them from the jobs that they used to have and used to do when those jobs disappeared. So what we're seeing in terms of the political context right now is a direct result of that. We have a lot of people who feel kind of left out.
disillusioned and largely as a result of economic changes in the last couple of decades. So what if we had that again, but this time with those white collar workers? And we'd have another group of people who were essentially left out, feeling like they've been victimized, not protected, not helped to deal with these big trends. And I think that's a very dangerous thing. I shudder to think what our politics would look like then.
[32:20.166] Tad Fallows: I'm guessing by the fact that you posed that question that you have some hypothesis about how we might prevent that from coming to place. Do you have some diagnosis or prescription on that?
[32:30.776] Dan Altman: Well, last time around, I proposed that we should have a new GI Bill that would really help people who were displaced as a result of globalization to retrain, re-educate themselves and pick up the skills that they would need to succeed in a more technologically driven, service driven economy. Some people have been able to do that. We have a tiny federal program called Trade Adjustment Assistance that's to help with that, but it's obviously completely inadequate. Mostly this works well when it happens in the private sector.
But we just haven't subsidized that. We have a terrible market for training in this country anyway, because people can just easily get up and leave their jobs. They can easily be fired. They can easily leave their jobs. So there's less incentive for companies to invest in training. We don't have a sort of apprenticeship program like they do in Europe, in Germany especially. There are so many things that we could have done to help people manage that transition to a more globalized, technologically intense world that we didn't do.
And I feel like we need to think deeply about whether we need to do similar things now for this gen AI revolution.
[33:35.44] Tad Fallows: And you have, know, I think from the beginning of time, people say, okay, well, the plow now displaced 90 % of farmers. So there's going be nothing to do. And again, you know, the mechanical engine displaced people and that has never actually turned out to be a problem, right? Every time people get displaced from industry X, there's new industry in place to work. Presuming that continues to happen now. Do you have, you know, perspective on low informed by your interest work time or others around what
what's likely to grow to sort of absorb that labor that's liberated.
[34:06.286] Dan Altman: Yeah, we haven't seen mass unemployment necessarily as a result of these technological changes. But what we have seen is stagnation in real incomes. So the problem is not that people can't get jobs, right? We've had historically low unemployment for a lot of years in the past couple of decades. But it's just that the real household and household incomes haven't really been rising. And so people feel that there's economic stagnation, especially when you've got this other group of people at the top end of the income and wealth distributions who are shooting away into the horizon. Right. So
So the growing inequality has made people feel left out even if they do have jobs. Now, if we think about what the future may hold in that respect and what types of jobs people will find, I think that they will find sort of service oriented jobs because there will be a wealthy minority that's able to pay for more and more services, whether it's your landscaping or fancy hairstyling or whatever it is, those in-person services that can't be done by AI will probably proliferate.
But we're also seeing more and more people taking the entrepreneurial route because they can't necessarily get paid as much as they think they deserve or ought to be paid in a corporate job. So they strike out on their own to try and do something. Fortunately, our economy is one of the best for innovation and entrepreneurship. But that's sort of coming under threat now too, because it's becoming a little less meritocratic because there's a lot of cronyism now and the legal systems being kind of.
turned into a way of extracting money from private corporations. So I'm a little bit worried that we're gonna lose that option as well.
[35:40.122] Matt Shechtman: Is there a time period that you would look back to that would say, you know, we're operating in a fairly similar paradigm. And is that kind of cronyism, levels of, you know, government intrusion involvement in the economy tied to the wealth gap? Like, would you look back and say, you know, what this is really reminiscent of is the late 1800s and the Industrial Revolution when, you know, the wealth gap was widening.
And, there was a lot of underlying cronyism and things like that. And maybe here's kind of how we got out of that, or is it, is it a new paradigm?
[36:20.154] Dan Altman: There's definitely a resonance with the Gilded Age. And so we are seeing these few people getting extraordinarily rich and becoming very cozy with government while there are a lot of people who are being left essentially with the same standard of living they've had or maybe even something worse. And we know how that ended up, right? In some countries that led to revolution. In the United States, there was a backlash and it sort of accelerated by the Great Depression. And we had a lot of legislation that was trying to fight some of those forces.
But it started even before the Depression with things like Sherman Antitrust. So there is resonance there. But I even see resonance with other countries more recently. You know, it's funny, people compare the U.S. to Argentina sometimes now. Argentina, place where I lived for several years. And they say, well, you you've got the administration here and you've got the Malay administration in Argentina and they're going to shake things up and they're going to cut spending and they're going to make it a much more
libertarian type of system. That's not happening here. That's happening to some degree in Argentina. But here, you know, we're actually looking a lot more like one of the Peronist administrations in recent times, the Christina Kirchner administration, where you had high tariffs, you had big deficits, you had taxes even on exports, you had state involvement in corporations trying to nationalize some of the more important businesses in the country. You had
potential for devaluation of the currency, which we're already seeing as a result of debts. I mean, this looks a lot to me like what I experienced living under Christina Kirchner in Argentina, nothing to do with Javier Millet, who's actually getting rid of tariffs, getting rid of export taxes and the like. So, you know, we don't have to go that far back in history to find some analogues. And I don't know if you want to start going down the path that Christina Kirchner took in Argentina.
[38:13.695] Tad Fallows: And so one of the things that you do is you write this or manage this baseline profitability index, which I think the goal is I understand is to look across a lot of different markets globally and kind of what's attractive today for investment. So, you know, clearly with your comments about Argentina or the U S you know, what, are you seeing given all the context of today's economy that, looks maybe more interesting today.
[38:36.068] Dan Altman: Yeah, so the baseline profitability index is assessing the prospects for foreign direct investment in countries around the world. It uses a lot of publicly available data with an exclusive algorithm to try and come up with a baseline for what you could expect when you take into account things like economic growth, but also some of the things that can erode your return, like expropriation and corruption and financial crises and insecurity.
capital controls, even real exchange rate fluctuations, all those things that could affect how much you're able to bring back into your pocket. So not just what you earn in country, but how much actually gets back into your pocket of your principal and return. And we see kind of two groups that are successful in this area. One is the group that has really good governance, where you have a really safe place to do business, an excellent climate for entrepreneurship.
Those tend to be countries like your Singapore's, also your Scandinavian countries. And then there are other countries that are growing really fast. Maybe they don't have quite so many advantages institutionally, but their fast growth and a reasonable institutional climate can help, like India, for example, and some African countries, and even a few Eastern European former socialist countries. So you've got kind of two groups where
you're balancing growth with these institutional factors. The United States finishes right in the middle of the pack right now. I don't think that would surprise too many people who are active in foreign direct investment, who are used to seeing higher returns than what you can usually get in the United States with direct investment. But a country like Argentina was sitting near the bottom for years because of these institutional factors that were just garbage.
[40:20.171] Tad Fallows: And so almost every country I'd imagine is experiencing some version of this, we could call it a K-shaped economy or a lot of the same dynamics and post-COVID dynamics, et cetera. The ones that are being more successful at, I don't know if you're saying that's a Poland or a Singapore or something like that, what do you see that they're doing right that maybe a US or other countries are having more challenges with?
[40:44.89] Dan Altman: Well, they typically focus on making it easier to start businesses and then protecting people who run businesses by making sure that they're not subject to corruption, that there's a transparent legal system in place, that they have no fear of expropriation or insider dealing by people in the government, that there's a reasonable fiscal situation so there's not a chance of a currency or fiscal crisis.
and that there's as little insecurity as possible as well. So you know that your assets are going to be intact. Those are all important things. And there are some countries where, as I said, it's not necessarily the case that you have all those factors in place, but they're fast growing countries where you actually expect real exchange rate appreciation to a large degree. That can be a big driver of the return that comes back into your pocket. And what I mean by that is,
If you think about how much money it would take to buy a factory in the US right now and you compare it to how much money it would take to buy the same factory in India, there's a big difference. But that difference is shrinking as India grows. And so your factory in India in terms of real stuff, like in terms of factories in the US, is actually appreciating value from year to year. That's a big increase in your return. So those are kind of the two sets of things that I've been looking at.
[42:03.371] Tad Fallows: You know, I mentioned maybe stream might also be interested in your take on this. think if we look at a lot of our members, you you're talking about, I could invest in a factory in India or Argentina, something like that. think typically they've been, hey, I've been investing in the Magnificent Seven or Nvidia for the past 10 or 20 years. And maybe it doesn't require as much hard thinking, but it's significantly outperformed these ideas of sort of, you know, rolling up your sleeves and doing more of the, you know, heavy lifting investing. I'm wondering if that's, you know,
just a sort of point in time and hey, markets are cycles and that's been a really good cycle for US growth tech or if there's, you know, we're gonna go to a place where you need to do more of the hard work and the economic fundamentals to try and get continuous returns.
[42:48.538] Dan Altman: Great question. And I think that there are people who are more curious about what you might find outside our borders right now. Historically, U.S. investors had a huge home bias. If you look back to the 80s, something like 90 percent of holdings were in U.S. securities for U.S. investors. That has changed. Now it's more like 60 percent, I think. So people have been opening themselves up. And that's a result of,
[42:49.443] Sriram Gollapalli: Thank
[43:15.034] Dan Altman: ease of investing through different platforms. It's also ease of getting information about investments. All those things have changed as a result of globalization. And I think we're going to see more interest in foreign direct investment as well. But it's already happening from people who own companies who want to do more investment overseas and more production overseas. Right now, with the tariffs that we're facing, some of these supply chains are having to reorient. So somebody who had a factory
in Vietnam might be saying, can I now move this factory to Bangladesh or some other country where there might be a lower tariff rate? And so you need to have an idea of how those assets are going to change in value over time. And things like real exchange rate appreciation are extremely important, especially if you're moving goods back and forth. So I think that there is renewed interest in this now, not just from an investment perspective, but from a perspective of doing business and production. The last thing I'd say about it is
If we look over this last 10 or 15 years, yes, certain US tech stocks have done really well, but even gold has outperformed US markets since the Great Recession. And this year, lot of foreign markets have outperformed the US just because the dollar has been depreciating so much. So there's definitely more interest in foreign markets, I would say, than there used to
[44:33.643] Sriram Gollapalli: In that respect, you know, with I've tried to slowly allocate it a little bit more like just broadly World Index or like think JP Morgan International Growth Fund and it's still not doing it's sort of hedging, but it's not doing as great as as Tad mentioned my Mag seven holdings. So, you know, the question is, you know, as we move forward, hopefully, mean reversion will happen and those things will sort of play out over here. My question was a little bit more around, you know, private markets and international private markets because
What we're seeing here is more and more companies, think, opening as a more recent example where you just can't have access to it unless you you're in the know or you can get access through someone you're seeing more of these companies stay private. How much do you see that? Or can you comment on that on the international side of people want exposure to international markets? Is buying some of these larger indices really capturing the the majority of these international market growth? Or are we seeing more of the same private market?
economics hold in these kinds of areas as well.
[45:33.262] Dan Altman: I think you have to separate it into the forex play and the fundamental play. For the forex play, I bought a bunch of German bonds earlier this year just because I wanted more euro exposure. And obviously with the dollar dropping, that turned out pretty well in a very short period of time. But if you're talking about fundamentals, it's not as cut and dried as you might think because a lot of US companies earn a huge amount of their profits overseas.
and lot of foreign companies earn a lot of their profits in the United States. So it's not really foreign markets versus U.S. markets in terms of just shares. If you want to capture a foreign market's growth, foreign direct investment makes more sense because you actually own assets in country. And so it's the asset value that's driving your return. You know, I think that with the
Overall situation right now, I do think there will be some reversion. I think some of these valuations are pretty insane for the Magnificent Seven and other companies that are driving these major indices. But if you look more deeply at U.S. indexes beyond the Magnificent Seven and some associated stocks, things aren't necessarily going that great. So if you are trying to have a diversified portfolio, I don't think you can ignore these foreign options.
[47:00.019] Tad Fallows: And you mentioned that gold has been outperforming everything. I think that's one where I've been feeling a little bit of that FOMO. Is that largely an inflation play? Is there something more that's going on there?
[47:14.478] Dan Altman: I think a lot of it is an inflation play that's driven by these enormous debt ratios that we now see in most of the major economies. If we look at the United States, Canada, Spain, France, Italy, the UK, Japan, we're all running debt to GDP ratios over 100 percent. Canada is in slightly better shape because they have a lot of financial assets to balance that. But you have these other six economies that are running enormous debt.
You know, that not only sucks credit out of the long end of the market, which drives rates up, but it also raises the specter of potential inflation because some of these countries might not be able to raise taxes or cut spending enough to reduce these debts. And so they're going to have to devalue to get out of it. They're going to have to devalue their currencies. And that means making creating higher inflation. And so I think that people who've just been watching the long end of this market and these increasing debts are saying, hey, you know, eventually
they're going to have to pay the piper. And when that happens, these currencies are going to be worth less. You can see the same thing happening in other markets that are potential inflation hedges like real estate, like maybe Swiss francs or something like that. But I think it's a lot to do with that.
[48:29.892] Matt Shechtman: And what are the various trade-offs of the currency devaluation that we're seeing? For somebody who's solely US invested, all you see is up and to the right with the S &P and other indexes. And so you're not necessarily seeing the impacts of that currency devaluation. Can you talk a little bit about that? And then the associated potential benefits of exports and things like that, and how somebody should think about movements in your home currency or others?
[49:00.964] Dan Altman: Yeah, mean, a lot of it depends on what you do with your money. If you are just trying to maximize returns in dollars and that's all you care about, then hey, maybe you don't have to diversify quite as much. But if you're actually worried about how much your dollars might be worth outside of the US because you do foreign travel or you have other things that you buy from abroad, luxury goods or whatever they might be,
then I think you do have to worry about it. And, you know, as I said, there have been big fluctuations already. I think the dollars lost 10 or 15 percent this year already against the euro. So, you know, if you had bought German bonds paying three percent or something, then you'd be close to a 15 percent return already on that, which is comparable to the S &P. And while the S &P may be peaking, I'm not sure that the euro dollar rate is peaking. So I think it's
Like I said, it depends on how you use your money.
[50:03.017] Tad Fallows: And I think, you know, if you look, I don't know, past several decades, let's call it, I think, call the US having extravagant privilege of the dollar and, you know, in general with such a large economy, if you choose to, you can sort of ignore the rest of the world, right? It doesn't really impact that much your job, your price level, your physical safety, what's happening in rest of the world. Do you think we're still in that era or is it going to be something where you can't choose to just say, well, if I'm happy taking my vacation to California rather than Paris?
I can kind of ignore what's happening elsewhere because I think, yeah, is that still a viable strategy?
[50:39.416] Dan Altman: We can't fully ignore it. know, the U.S. is less export dependent than a lot of other countries. But for consumers, still about 10 or 11 percent of what they buy is coming from abroad. And that's not just being driven by champagne. You know, that's being driven by imported clothing and stuff like that. It could be at any price level. And so those things get more expensive. Right. It's not just tariffs. It's also exchange rate changes that make those things more expensive. So if you think about that as 10 percent of your consumption,
maybe more for people who buy luxury vehicles or watches or whatever it might be. That makes a difference. And so we are going to get poorer as Americans because of the depreciation of the dollar. We can't avoid that. And the question is how far that's going to go and whether we're going to do anything to offset it.
[51:28.968] Tad Fallows: Well, really appreciate you taking the time to join us on the podcast here, Dan. If folks are interested in learning more about what you're doing, where would you point them to?
[51:38.212] Dan Altman: Well, they should definitely sign up for the High Yield Economics newsletter, which is on LinkedIn, comes out every Friday. It's totally free. We also have the Gross Domestic Provocation podcast, which just launched with my friends Jason Freeman, who is a very experienced hedge fund guy, ex-Goldman, ex-Citadel, and Jeremy Hudson, who's a marketing whiz, who I worked with at InstaWork, and he's been at several big tech companies like ZocDoc as well. The three of us are sitting down to talk about what all this
economic news means for you. So from one podcast to another, you can check it out and look out for that book that's coming out next year from Crown. It's called Economics for the Win, Practical Principles to Help with 30 Life Decisions. So I hope all those things will be useful to people to make better decisions into the future.
[52:25.451] Tad Fallows: And you didn't mention the tequila bar. Where does one go for that?
[52:29.274] Dan Altman: Not tequila. It's going to be a jazz performance space in Englewood. It's going to be called Manteca, which is an old Latin jazz song by Dizzy Gillespie and Chano Pocho. Dizzy Gillespie used to live in Englewood, New Jersey, so it's a great way to bring that jazz history back into the present. I don't think we're going to be selling tequila right away because liquor licenses in Bergen County, New Jersey can go for upwards of quarter million dollars, but maybe someday.
[52:54.045] Tad Fallows: Excellent. Well, thanks so much for joining us.
[52:56.781] Sriram Gollapalli: Thank you so much, Dan.
[52:56.846] Dan Altman: My pleasure. Take care.
[52:57.712] Matt Shechtman: Thanks Dan.
