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How Scott Galloway Turned $8M Into $120M Through Investing

My First Million

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  • Scott’s FTX Bankruptcy Win
    • Scott Galloway bought $10 million of FTX bankruptcy claims for $2.2 million after carefully analyzing asset valuation.
    • This distressed investment turned highly profitable as the assets’ value recovered, highlighting his expertise with bankruptcy filings. Transcript: Sam Parr Do you know what I’m talking about? Yeah. Scott Galloway So I always like to counter it with how many times I fucked up. So I bought Netflix at 10 bucks a share. I’m sorry, at 12. And I sold it at 10. And now it’s at 1100. So I get it wrong all the time. I can’t stand people who are constantly taking pictures of all their wins and posting them on social. So I get it wrong all the time. This one I got right. And that is, I’m that guy who reads bankruptcy filings. And I read the FTX bankruptcy filing. And essentially, they list all their assets. And when you declare bankruptcy, your creditors come in and say, all right, we’re going to take all the assets. We’re going to sell all the furniture, sell all the companies, sell all the IP, whatever we can sell. And then we’ll divide it up and give it pro rata to the creditors based on the claims they have. There was approximately $8 billion in claims against a bankrupt FTX. And I went through the list of assets. And one of the assets was they had said they’d made a $500 million investment in Anthropic. And I thought, wow, I looked when they made the investment for the life of me, I couldn’t find the valuation. I assumed the valuation was at about 5 billion. So I thought they probably own about 10% of Anthropic. It was trading, I estimated it was worth around 40 billion. So I thought, okay, their stake in Anthropic is worth 50 cents on the dollar. In other words, creditors claim $8 billion in claims against the company. And I believe that stake in Anthropic was worth probably $4 billion. So I thought, okay, eventually the creditors are going to get $0.50 on the dollar just on the Anthropic shares. At the time I started, at that time, you could buy claims against the bankrupt FTX for $0.22. So I bought $10 million worth of claims for $2.2 million. And it’s better to be lucky than good. Crypto took off. Everything they had invested in went crazy. And it looks like we’re going to get $0.160 on the dollar. So that was kind of an incredibly lucky. It was also a good trade. There was a little bit of skill in there. I did my homework. (Time 0:00:53)
  • Enjoy Vaping Bankruptcy Turnaround
    • Scott invested $2.5 million to bring Enjoy vaping company out of bankruptcy and later sold it for $75 million.
    • Despite ethical concerns about vaping, the investment was a regulatory play resulting in a 30x return. Transcript: Scott Galloway Enjoy the rest these out for free if you’re a smoker, because let me be clear, no one under the age of 25 or anyone who doesn’t smoke should vape nicotine. It’s not good for you, but it’s much less bad than smoking combustibles with tobacco. Nicotine is highly addictive, but it doesn’t cause cancer. It’s bad for brain development. I don’t want to suggest anyone get addicted to nicotine, but I thought this is great. It’s smoking cessation. We’re getting in. We brought it out at a valuation of $60 million out of bankruptcy. My friend Jason is just this super smart, super aggressive guy. Sam Parr Wait, so you, you heard about this thing and then you Googled it and you saw it was bankrupt. And then you’re like, I’m interested. Shaan Puri What came first, the chicken or the egg? Was it Jason was going to go look or you found the company, then you found Jason? Scott Galloway No, no, I wasn’t that smart. I had heard about this company because two of my friends had quit using it. And then Jason called me and said, I’m about to bring a company out of bankruptcy. Have you ever heard of Enjoy? And I’m like, oh, yeah, I know the company and I like it. So I put $2.5 million in and he brought it out of bankruptcy for $60 million and said, this is a regulatory play. We’re the least bad actor here. There was Juul, which had gone up to like $10 or $15 billion in market cap, but was marketing to kids and selling bubblegum flavor and was just getting hammered correctly and justifiably In the press as addicting a ton of kids. High schools in the Midwest were pulling the doors off of bathrooms because so many kids were vaping. And then the absolute low point was there was a huge raft of kids going into emergency rooms with what was called popcorn lung. Sam Parr Yeah. Scott Galloway And basically kids were getting so addicted to vaping that they were buying the vape liquid in festivals and out of people’s trunks. And people who were doing homebrew of this vaping liquid were mixing in, were cutting it with, I think, vitamin A acetate, not recognizing that would have a really negative reactions On kids’ lungs. Sam Parr And by the way, during that era, I knew people who worked there. I’m pretty sure they gave all 1,000 employees from the top to the bottom 500,000 or a million dollar bonus to retain them as employees because all the press was horrible and they had to Like deal with this conscious of like, shit, I’m selling this horrible stuff. Okay, but I guess it’s worth it if I get a million dollar bonus. Scott Galloway It was crazy. We really were. We weren’t cool at all. Enjoy wasn’t selling into teenagers looking to go to raves. Enjoy was selling into a trucker. I mean, the stats around smoking are crazy. One out of three people who buy a cardinal cigarettes promise themselves it’s the last time they’re ever going to buy cigarettes. It is just such an incredibly malicious, mendacious, addictive. I think it’s the second most addictive substance. I grew up in a household, just a quick parable about me. I remember I never went to the doctor. We just weren’t the kind of family that went to doctors. It was like Robitussin was our emergency room, you know, Robitussin, use Robitussin for everything. And I got so really sick with a lung infection. They took me to the doctor and the doctor said, okay, he’s got a serious lung infection here, antibiotics. And also Tom and Sylvia, my parents, you can’t smoke. So on the way home, we rolled down the window so they could smoke on the ride home. And then my dad went in first, got a wet towel, stuck it under my door jam, stuck me in my room so they could continue smoking. I mean, they were so radically, my mother died of a smoking related, they were so radically addicted to nicotine. So our tobacco, anyways, brought it out uh for 75 million popcorn long and i’m like and kids are dying and not because of anything enjoy or even jewel was doing but because vaping had become So big that now kids were buying black market liquid that was damaging their health and i’m like great i’m this guy who who claims to care about young men and i’m putting them in the hospital That was such an incredibly low moment for me. And I remember I resigned from the board because I’m like, I just can’t stay on, I was on the board of my, I just can’t stay on this board. My, I was on the board of my kid’s school and the headmaster was putting out memos warning of vaping. And I’m like, I am such a fucking hypocrite. And I tried to sell my steak and there was no market for it. There was no market for it. And Jason and the CEO, Ryan, were real visionaries and said, this is all about an FDA play. We’re the best actor in the space. We’re selling to people who want to quit smoking, where there’s almost no youth complaints of underage people buying in third-party retailers. And they spent about 100 or 120 million bucks, I think, maybe a little less than that, trying to get FDA approval. And they thought, if we become one of the three or four companies that has FDA approval around smoking cessation, this is a regulatory play. Anyways, five, seven years later, 80 or $100 million, we get the regulatory approval and we sell the company for, I think, $2.2 billion to Altria. So that was a 30X on my investment. Sam Parr Does that mean you turned $2 million into $60? Scott Galloway Two and a half into $75. That’s fucking insane. I gave $25 away, though, because of my guilt tax. So anyways, that hands down, nothing was ever like that. (Time 0:10:18)
  • Yellow Pages to CRM Success
    • Scott invested about $4 million in Yellow Pages, a declining but cash flow positive business.
    • They transitioned it to a CRM company, increasing stock value significantly, showing value in unsexy investments. Transcript: Scott Galloway Yeah. Dexmed. That’s probably not my second best, but my third or fourth. Really great CEO, a guy named Joe Walsh. And you’re talking about yellow pages, the book. Yellow pages. The things dropped on your porch. Amazing business. It’s like 600 million in revenue and 280 million in EBITDA, but it was declining 12% a year. Sam Parr It’s just advertising? Scott Galloway Yeah, the local plumber. There’s still a lot of people that in rural parts of America that get a phone book. It’s almost gone, but the business still, it’s like AOL dial-up. It’s like, why would anyone have AOL dial-up? Well, people still do. My mom does. There you go. Sam Parr It’s just $20 a month. Scott Galloway So again, another Jason Modric investment. I went on the board. I invested, I think I invested more than I think I missed about 4 million bucks. And, and I really liked that board because I could add a lot of value. I sort of understood the business and they were trying to transition to become a CRM company because the core asset of the company was relationships with tons of small and medium sized Businesses. And they started selling them calendaring and clienteling software. And basically, we would go and buy the biggest Yellow Pages company in the South and the biggest Yellow Pages company in Canada, then the biggest Yellow Pages company in Australia. Are they like franchisees? Or is there one Yellow Pages? Or how does that work? Big companies. There was like one or two companies in Australia that were still in the Yellow Pages business. And they traded it two to three times EBITDA because everybody knew they were going away. But you could basically buy these companies, and then you would close the headquarters, keep the 30% of the best salespeople, and then let go of everyone else. And as long as you cut costs faster than 12% a year through consolidation, you were cash flow accretive. And every year the stock price went up. And then what the management team did that’s just staggeringly impressive is they were able to transition from a Yellow Pages company to a CRM software company. And they actually did it. So I think we bought in at like two or three bucks a share in the stocks now, I don’t know, at 15 or 20 bucks. I’ve already sold my stake. I think I four or five decks there x there i didn’t 10x but again what is less sexy than yellow pages right and all the i invest in that sounds remotely cool and i think this is a lesson for Listeners if you have financial capital invest in the unsexy and also more importantly your human capital. (Time 0:16:32)
  • Invest Broadly in Index Funds
    • Scott advises young people to invest mostly in index funds unless they have exclusive deal access or niche knowledge.
    • He emphasizes geographic diversification to avoid overexposure to the US market downturn. Transcript: Shaan Puri I agree with everything you just said, but at the same time, I have this like cocky part of me that’s like, cool. Yeah, but I’ll still be in that top, top one or 2%. I’ll still get there. And so I’m just curious, are you wired like that? Like, you know, knowing, even knowing that you still play the, like right now you’re playing the internet personality game. That’s kind of like a Hollywood, that that’s like the Hollywood ratio, not the tax law ratio. You know, you’re doing these exotic investments when, you know know, the math would show us that just being a boring indexer and a compounder that way is going to work better than being A picker. But we do it because we like it. It’s fun. It gives us these other returns. Plus it feels really good to be smart when you get it right. So like even knowing what you know, realistically, if you’re 28, you know that or heard that, would you do it any differently? Scott Galloway Yeah, but just to be blunt, and this is a story of privilege, I have access to deals that most people don’t. And this is also going to sound arrogant. I have an undergraduate degree in economics. I was a graduate student instructor in macro and microeconomics. I worked in fixed income at Morgan Stanley. I know more than your average bear about the markets. And I get deal flow that people don’t get. People will call me and say, hi, I’m the CEO of this company, and it’s going public. (Time 0:20:22)
  • US Market Downturn Insight
    • The US market is expected to enter a 10-15 year downturn with multiple contraction.
    • European and Asian markets offer more attractive valuations and potential growth in this environment. Transcript: Scott Galloway You’re not. Because I believe the U.S. Is going to go flat for the next decade. And if you look at the P of 26 versus Germany at 22, Japan at 18, China at 14, and you look at the head up your ass, sclerotic, reckless, ridiculously fucking stupid decisions of this administration And how it’s undermining our brand of rule of law and consistency, that is going to result in massive multiple contraction. And it doesn’t matter how good the company is. If the broader market is engaging, is registering multiple contraction, you can’t outrun it. So I have been massively transitioning my U.S. Holdings into Asian, European, and also the only companies I invest in have at least 50% of their business abroad because I think the U.S. Is about to go into a 10 or 15 year down cycle. (Time 0:22:11)
  • Value Health and the Moment
    • Good health means managing many problems; poor health reduces focus to a single critical issue.
    • Life is uncertain, so appreciate moments and relationships while you have them. Transcript: Scott Galloway I’ve been reading some Buddhism recently and I love this one thing I read really struck me. And that is the person with good health has thousands of problems. The person with bad health has one problem. And you guys are, well, you guys are younger than me. When I went into my 50s, something happens in your 50s and it’s really awful. Two or three of your friends die. Just like weird genetic shit pops up. I had a friend who was healthy, ripped, handsome, happy, this weird nerve disorder, borosculane, took him out. Another friend, we’re in Tulum, 51, having a great time, great life, three kids, killing it professionally. A little bump on his head. What is that? I don’t know. I got to go and check it out. It’s leukemia, but they think they can get rid of it with pharmaceuticals. I don’t need chemo or anything. Oh, it’s not going away. I need chemo. Oh, it’s come back stronger. I have to get a stem cell transplant. And they basically give him a very intense, and then it’s like, oh, it’s back. I’m done. And he’s gone. Like diagnosis to death, six months. And you realize like, okay, if you’re waiting to have washboard abs, if you’re waiting to find the perfect spouse, if you’re waiting to have more money, don’t wait. I mean, really try and take advantage of the moment. Tell people you love them. Be nice to yourself. Be kind to yourself. Enjoy yourself because it’s going. I mean, you guys are sort of at the age where time starts to fall off a cliff, but I think a lot about the notion of freedom. I always thought that money would give me the freedom I wanted, and it has given me some freedom from the economic anxiety I’ve always had, and it’s given me a lot of options, but what I Have figured out as I’ve gotten older is that true freedom is releasing yourself from the conventions and expectations of a broader society around what I should write or what I should Say or how I should condition something and say, you know, I constantly, when I talk about young men or I talk about what I think is going on in the world, I feel the need to add a sentence Such that I water it down such that the far right or the far left don’t come for me and shame me. And I still haven’t found the freedom of releasing myself from the conventions of expectations. Now, I still want to be kind because I like that. I want to be a good person, but I still fall, I still have a lack of freedom around really, my goal with my content is to catalyze a productive conversation that shapes better solutions. And I might be wrong. The conversation I’m catalyzing, the way I catalyze it, I might get it wrong, but that’s my goal. And yet I’m still too fucking worried about being shamed or getting it wrong or saying something stupid or disappointing people or not being liked by strangers. So I still am not free. So I think a lot about what does it mean as I barrel towards the end to have real freedom? Because if you’re just focused on getting to a certain point and think that you’re going to find the perfect X, Y, or Z, no, you’re here to learn. You’re here to enjoy yourself. You’re here to be as kind as possible. You’re here to surround yourself with as many people as possible who love you and let you love them. But I’m trying to get off this hamster wheel of constant ambition and engaging in true freedom. (Time 0:25:13)
  • Keep Perspective on Success and Failure
    • Understand that no success or failure is purely your fault; much depends on timing and luck.
    • Be humble and forgiving of yourself, realizing nothing is as good or bad as it seems. Transcript: Scott Galloway You’re referring, I have a podcast called Office Hours. I found when I was teaching, you have something called Office Hours from your professor and people come to your office and they’re supposed to ask you questions and say, well, I don’t Understand the brand core identity for the tech. No one ever came to me to talk about strategy or brand strategy. They came to me to talk about life advice or professional advice. Sam Parr Like uncle shit. Scott Galloway You know what it’s based off of? It’s based off of the, remember the show Frazier, the call-in he did with Dr. Frazier at a call-in show. It’s basically that people can call in and ask anything about life or should I move to Houston? I’m engaged. I’m worried that my fiance can move. I’m worried that our relationships can, you know, whatever it might be, or should I, should I, is it too late to buy Nvidia? I mean, it’s all over the map and I enjoy giving advice. I think I’m good at it. The one piece of advice, if I could only give one piece of advice to young people, it’s that nothing’s ever as good or as bad as it seems. And that is a lot of your success and a lot of your failure isn’t your fault. And at the end of your life, and there’s research here, when you’re on your deathbed and that’s it, you’re not going to take a walk on the beach. You’re never going to be with your wife again. You’re never going to get to laugh with your kids again. And I’m an atheist and I get a lot of power from my atheism. The things you’re going to regret, you’re not going to look back and say, I regret that this happened. What you’re going to regret is how upset you were. And so recognize that when you get fired or you have an investment go bad or you have love that’s unrequited or not returned or you screw up and you say something unkind or professionally You just you’re not on the right path. Keep in mind, again, you’re going to be upset at how upset you were, not at what happened. And at the same time, on the flip side, also recognize that when something really good happens to you, whether it’s good health, or you have an investment that triples, or you get promoted, Realize a lot of that isn’t your fault. And you should be, you’re never more prone to a really stupid mistake than after a big win, because you start believing your own press. So be humble, really be grateful, realize a lot of it is the fact that you were born at the right place in the right time and we’re in the right position at the right time to do something. And just forgive yourself when things don’t go well. Nothing’s ever as good or as bad as it seems. Like try and look in the mirror and say, if you got fired, can add value to a company. If someone doesn’t return your love, you know, I could make, look in the mirror, I could make someone very happy. Investments will come and go. I will find good investments. If I keep trying and I’m a good person, I work hard, I will achieve some level of economic security. Because, again, it’s just not, nothing’s ever as good as bad as it seems. (Time 0:34:19)
  • Real Estate as Long-Term Store
    • Scott invests heavily in high-end real estate in cities favored by billionaires like Dubai, London, and Palm Beach.
    • He views these properties as stores of value and ways to maintain family connections. Transcript: Shaan Puri Are you like, I want to compound at 15%, 20% Do you have a, do you have a target and do you, do you actually track it for yourself personally? My target is I just want to be a baller. What does it take to do that? Same. I don’t. How does one, how does one ball? How does one ball, Scott? Does it start with not asking that question? Yeah, that’s right. Scott Galloway It immediately outs me as not a baller. I’m going tonight to some British hotspot or some hotspot in London, and the doormoman lets me in because I think she thinks I have more money than I have. So I need to catch up to her expectations. Of me. Of me. I need the perception of me to catch up to the reality of the perception. You should ask her, how much money do you think that I have? So I know I need a target. Yeah. I need a goose to chase. It’s like when a woman returns my eye contact at a bar, I’m like, she’s thinking I’m rich. Anyways, I don’t, I’m not that thoughtful. What I loosely try to think, I’m now at the point where I’m not looking to get rich, I’m looking to not get poor. So I don’t think of returns, what I think of, I want to find good investments and good assets. And I want to make sure that, I always, I do a lot of what they did in Sarbanes-Oxley. I do a lot of stress testing on my portfolio. I’m like, okay, what if the NASDAQ got cut in half tomorrow? What would that mean for me? What would happen if there was a real estate crash? My biggest investment, and we haven’t talked about this, my hands down, my biggest personal investment theme is that I think income inequality is only going to get worse. And I’ve been saying this for a long time. I think it’s terrible, but I think it’s only going to get worse. I think the money has totally washed over Washington. We now have a, we now have a president who’s opened a meme coin, which is essentially a Swiss banking account where anyone could put money in. Shaan Puri Oh, by the way, congrats on your, uh, the 500K membership you bought to the Trump friends club or whatever. Scott Galloway Oh yeah. Yeah. The ambassadors, the douchiest douches in doucheville. Um, yeah. For 500K. I’d pay a lot of money not to be in that. Anyways, and by the way, I think those guys— He’d sell you that, too. He’s a genius, actually. People have been really critical of that. My sense is, write a free assembly. They can do whatever they want. What I think is criminal is having a meme coin that Putin could put— wouldn’t Putin be stupid not to call Trump and say, I’ll put a billion dollars in here, Polson, I have these mathematicians, And I’ll take the value because price discovery is at the margins. I’ll take the value of this thing up to 30 billion. You own 80%. I’m going to make you the wealthiest man in the world. And by the way, in unrelated news, could you stop supporting Ukraine? Wouldn’t he be stupid not to make that call? He’s losing half a billion. Sam Parr What’s the Trump coin? It’s called Trump coin. He has a meme coin. It’s insane. Yeah. What’s it at now? What’s the market cap of it now? Wasn’t it like $5 billion? Scott Galloway Oh, it went to $20. Now I think it’s at $3 or $4. Sam Parr By the way, you want to talk about— Wait, this happened the day before the inauguration, yeah? Scott Galloway Okay, hold on. You want to talk about Grift? They have flooded the zone with so much crazy shit. You want to talk about Grift? They announced the Trump coin the Friday night, the darker Friday night before his inauguration so it would get lost in the news. 30 people made $800 million over the weekend. I’m going to guess, I’m going to go out on a limb here, that those people probably got a call maybe from someone close to Trump saying, launching a coin, you should do this. Then over the course of the next couple of months, I think about 80,000 people lost billions of dollars, i.e. Retail investors. Then as the lockup’s coming off, he announces a big dinner to hype the stock. Then he decides, oh, you know what? The Division of Justice, the Department of Justice investigating scams in the crypto market, we should close that unit down. The grift here, if any Republican ever uses the word Hunter Biden, it should be like, what Hunter Biden has been accused of is a parking ticket compared to the double murder of grift this Administration is levying against the American public. But also both could be wrong. Sam Parr Both could be wrong. Like both could be wrong. Like, you know, I cannot stand when people say, well, what about this? It’s like, that is also bad. You know what I mean? Like we could have two conversations. Scott Galloway To your point, I almost respect we Democrats are corrupt for hundreds of thousands of dollars. Speaker Emberts of Pelosi trades stocks. That’s fucking insane. She’s in a meeting with Health and Human Services and they say, oh, we’re going to invest more in payment systems using AI. And then she goes out and she buys, this happened, options, call options on Tempest AI. And then when she discloses that she’s bought options, the stock surges 30 or 40%. So Democrats have been corrupt. We’re just corrupt for small ball. He’s corrupt for billions. And the damage she does in terms of reducing Americans’ confidence in the market is bad. But the ability to say, hey, I’m thinking about invading Taiwan. Can you make sure that your attack submarines and your carrier fleets don’t show up in the strait of Taiwan? And by the way, we’re buying a shit ton of Trump coin. And nobody knows. That’s grift on a different level. Anyways, where I started this rant was I think income inequality is only getting worse. I think there’s a small, what I call, emerging cohort of what I call transnational oligarchs. And that is the point, really, 0.1% that has access to influence and deal flow and corruption and gets exponentially richer. And unfortunately, those folks no longer have a vested interest in the health of their host nation because they have their own schools. They have their own rights. I will always have access to methicestone. I never get it right. I will always have access to family. I could be living in deepest, reddest Mississippi. If someone in my life needs to terminate a pregnancy, I’d have no problem. If someone comes after my rights, I can lawyer up like no tomorrow. If they start rounding up Jews in the United States, the same way they’re rounding up people with the wrong tattoo, I can peace out to Dubai or Milan. So the transnational oligarchs are losing a vested interest in the success of their host countries and democracy and kind of rule of law because they have their own rule of law. They have their own bill of rights. And so what I see is a group of people who are becoming so exponentially wealthier than the rest of the population. And I think, okay, that’s terrible. I rail against it. I’m trying to work against it. But at the same time, I’m not going to fight city hall. I’m going to try and make money off of it. And the way I’m making money off of it is the following. The really wealthy, the 0.01% want to live in one of five places. They want to live in Dubai. Sam Parr How much is 0.15% or 0.0? Scott Galloway Anyone who’s worth more, I think it’s like anyone who’s worth more than $50 million. Five zero. Okay. Okay. So, by the way, the number of millionaires in the United States has doubled since 2020. The number of billionaires has gone from 500 to 2,510 (Time 0:45:46)
  • Effective Romantic Icebreaker
    • To express romantic interest confidently, approach strangers and make them feel safe.
    • One effective opener is asking to take a picture, which leads naturally to a shared moment. Transcript: Scott Galloway Up to that point. It was amazing. Yeah, I imagine a lot of young men listen to this podcast. You know, your goal is to get to know. What do I mean by that? Send your LinkedIn profile or emails to jobs you’re not qualified for. Find friends you’re interested in hanging out with and try and hang out with them. Put yourself in the agency of strangers and absolutely develop some game, a plan such that you’re confident enough to go up to strange people, same sex, other sex, and express romantic Interest while making them feel safe. And the only way you get to great yeses is through a shit ton of no’s. So start working on the no’s. And by the way, if you don’t know what to say, the little dicky pickup line. Shaan Puri He just goes up to a woman and he says, excuse me, what’s your availability right now as far as being hit on? The most polite pickup line that’ll make her laugh. I got a better one. I got a better one. Scott Galloway You approach him with a camera and you say, will you take a picture of me? Everyone always says yes. If you say, will you take a picture of me? (Time 1:04:50)