100 – Election Aftermath | Trump’s Win, Healthcare Overhaul, and Market Shifts

Marcus: 0:00

If you enjoy this content, please take a moment to rate and review it. Your feedback will greatly impact our ability to reach more people. Thank you. Episode 100. Yes, we made it. Yeah, and uh, what an auspicious episode 100 we have. Yeah, we did not plan for episode 100 to be recorded the day after election day. We're recording this on Wednesday, November 7th, and, uh, the whole world knows that the results are in at least for the presidential and the Senate. I think they're still thrashing around on the house. Um, and so by the time you listen to this baby, or maybe not, that will have been figured out, but, uh, there's, there's no question in terms of the both popular and electoral college votes for president. Um, Donald Trump is the president elect and, um, I think it's, you know, from a, from the perspective of everyone worried about civil war, the victory was so decisive. I don't think there's any concern about that any, anytime soon.

Vic: 1:00

I think that's right. I mean, I, I think I was pretty shocked. I think everyone was pretty surprised at how big Trump's win was. Yeah. Uh, but the silver lining in that is that he won the popular vote. He won the electoral college. He won everything without I mean, even if there was some some election somewhere that had a question or a few ballots. It doesn't matter, right?

Marcus: 1:23

Yeah, I mean, I think so many people were worried, you know, this thing is no way it's going to be done in 24 hours It's going to drag on for weeks. Like that was kind of the that was the default narrative, right? And, um, we don't have that, right? We have, we have clarity on what's going to happen. So, um, I think that is, that is a good thing. And, you know, look, we're going to spend a very short amount of time running through a couple of stories. And then I, I want to spend our episode 100 kind of looking back over the last 99 episodes that we've, that we've done in the healthcare world we knew and the venture capital world we knew. There were enough. Twist and turns in that yeah, you know over the last year and a half that we've been doing the show and Holy cow, it feels like we are in for a wild rollercoaster ride

Vic: 2:10

Yes, the next the next six months. I think you're gonna be pretty wild a lot of change It's unclear what, we have lots of opinions, but none of them are validated because it's only 24 hours in. Agreed. A lot of change.

Marcus: 2:22

Agreed. Agreed. Uh, but I think, I do think some things are definitive. Oh yeah. And I think those things that are definitive will both be attributed to the election results, as well as things we can kind of start to bank on now. Right. Yeah.

Vic: 2:38

Yeah. I think that's right.

Marcus: 2:39

So we'll, we'll hash all that out. So with no further ado, episode 100, let's dig in. Uh, all right. So let's start with the actual results, Vic.

Vic: 2:58

Yeah. So I think probably most people know Trump won. I mean, right now there's a couple states still outstanding, but 295 electoral college votes are in his camp. He needs to 70 to win. So obviously it's finished. He might get to 306. Either way, he won by a lot.

Marcus: 3:16

Yeah, yeah. Decisive win.

Vic: 3:18

Um, the Senate. The Senate is, I think, pretty clearly between 52 Republicans, it could get up to 54. But there are two, uh, pretty moderate Republicans from Maine and Alaska. You know, if they only have 52, they're going to, they're going to have, um, kind of like a Joe Manchin in, in a reverse where you're going to have to go through these moderate Republicans for, to get anything done. If they're able to get to 53 or 54, they'll have a little more leverage.

Marcus: 3:53

Yeah.

Vic: 3:53

Yeah.

Marcus: 3:54

All right. So let's, let's hopped over to the markets. Um, I, I, I think the first thing I looked at when I woke up this morning was the markets. I didn't look at the actual count results. I knew, I knew Trump won, so I was like, I the numbers on that. But I wanted to see how is the market responding. Um, and really interesting. All the markets were up, but the Russell 2000 index, uh, was up 8%? Yeah. On the day?

Vic: 4:23

Yeah, it's 8 percent today. So on the day, the day, right, exactly, which is a very surprising to me. I mean, I think, um, I think it's a view that the markets have that I share that. There's going to be a lot of benefits to U. S. based companies and the Russell has been pretty beaten up. It hasn't, it hasn't gotten all the, uh, kind of growth this year that, that the S& P 500 or NASDAQ has gotten. And so I think there'll be, it'll be some benefits to all companies that are for profit in the U. S. But I think it was sort of a catch up, like, well, you know, rising tide's going to lift all these boats and the Russell's a little behind.

Marcus: 5:08

I, I, I feel that this is. A lot of vindication for what we've been talking about for many, many episodes now, which is we're in the early stage venture capital stack. The companies we're investing in are smaller companies. You know, if one day they get to an exit, it's likely they're either going to be in a rollup or a small cap company. Right. Much more likely they'd be in the Russell than the S& P. Yeah. Right. Right. Um, and I think Our market segment has really been depressed for a long time. Yeah. Um, and, and it's because the, there's been so much consolidation at the top of the stack because we can't have M and a activity happening. Right. So when you, when we don't have M and a activity happening, it's actually the smaller companies that. that struggle and suffer. There's no liquidity. There's no exits. There's no, you know, turnovers. There's no return of capital. Um, and few and everyone else can just buy the mag seven on the public market. So it's like, why would you even play with the private markets? There's no, there's no alpha there, right? There's no upside to doing it.

Vic: 6:18

Yeah. Yeah. I think that's right. There's a lot of cash sitting on the sidelines that would like to do MNA. I think there'll be I mean, one of the predictions that's not very controversial is there's going to be a lot of M& A activity in the next year, the sort of pent up. There's boards that, you know, have ideas about corporate development, but they haven't wanted to fight the regulation of the FTC and DOJ. Um, so yeah, I think it'll benefit small cap, it's going to benefit our portfolio. It's going to benefit the, you know, the, the. Business environment broadly. And the other thing that I think is pretty different in the Russell or our portfolio as compared to the large cap is you're, you're subject to regulation. You don't have ability to capture regulators. You're not lobbying. You don't, you don't have the girth. Yeah. Maybe some small businesses can group together. But it's not like Apple or Google or Amazon lobbying for something. And so cutting regulation, I think, uh, really helps the smaller companies and the venture backed companies. Yeah,

Marcus: 7:21

yeah. I mean, I think it's interesting that the response from the street was Buy up Russell.

Vic: 7:28

Yeah. Right.

Marcus: 7:29

Like that's the opportunity you want to front and run. And that quite frankly, the S and P and the Dow kind of had the Trump win priced in. Yeah. Right. And whereas the Russell didn't have it priced in. Yeah. So I think that's really interesting. Uh, and then this article in the wall street journal that, you know, they, they cover yields and, and ETS, but they do talk about winners and losers. Um, big tech and crypto Tesla stock, uh, you know, went shot through the roof. Yeah, today. Nvidia did very, very well as well. Um, crypto, uh, I mean, Bitcoin is all time high, all time high. Yeah. And, and the fast follower to Bitcoin right now is Solana and it had like 20 percent jumps right on the day, day over day. Yeah. 20%, which is pretty crazy. Pretty crazy.

Vic: 8:16

Yeah. I mean, I think a Trump win in this manner is somewhat a risk on it's a clear

Marcus: 8:24

signal that we're risk on. Right. Right. We're, it's definitely, uh, a very economic oriented vote, right? Like, like that is the core issue. And so I think that's why the markets is the place to look to see what the, you know, what, what the response is. Uh, conversely, there's a, there's a clear view that. tariffs are coming. Yeah. And so if you're a tariff exposed company, those, those shares dropped. And so think, you know, Best Buy, Williams, Sonoma, Nike, Target, all those stocks took a pretty big hit.

Vic: 8:56

Yeah. Yeah, that's right. I think, um, I mean, this was, I think it was an economic election in my view. Part of the attraction to Trump is If you're not happy with the economic environment today, I just want something different. And whether I agree with everything Trump says or not, probably no one agrees with everything he says. Right. I'm, I'm falling behind, especially the lower part of the K, you know, the lower income, less, less educated. Yeah. they are suffering. And so I think the financial market is reading what I think is going to happen, which is there'll be stimulus tax cuts, the Fed stimulus, there'll be regulation cuts, and hopefully it will get to the general population, but it's going to go through financial assets as a first stop because that's what always happens.

Marcus: 9:51

Yeah, yeah, no, I, I think that's, I think that's right. Uh, the Fed prepares a rate cut amid economic contradictions.

Vic: 9:57

Yeah. So it's a, you know, previously scheduled Fed meeting tomorrow. It is, uh, highly anticipated. They will do a 25 basis cut. I do not expect, um, Chairman Powell to change his direction based on something like an election. I think he. He wants to say he's data driven, and I expect he'll do a 25 bit work cut.

Marcus: 10:24

Yep. I agree with that. We are seeing, uh, articles starting to explore what a Trump administration will bring to healthcare. Um, I think we, we have to see whether or not this is going to be a sweep or not. If this is a sweep, it's going to be a very, very different story than even what this story is focused on. This is just really focused on the, the regulatory agencies, um, not sort of the, you know, You know, the full stack of what could happen. Yeah, this is based on what

Vic: 10:54

could the president do without Congress. That's right. That's right. You know, there is a, I don't know, 50 50 or even 60 40 chance that the ruling will get the house. Yeah.

Marcus: 11:04

So, so, uh, I mean, right now people are scrambling a little bit and, and, you know, Trying to read tea leaves because trump has not been uh, abundantly clear about his views on health care Uh, you know, maybe they're trying to pull his playbooks off the shelf from from his uh, 2016 uh run But it seems like the the payers did pretty well in the markets Um with a view that the deregulation will actually kind of reverse course for medicare advantage Um, because it's more You You know, pushing risk capitated and it's more

Vic: 11:38

market based. It is market based kind of approach, which I. I think Trump is on record of saying he prefers.

Marcus: 11:45

Yeah. So that, that's a, that's a win for, for insurers. Uh, just given what's happened over the last 12 months. Yeah. Right.

Vic: 11:52

Yeah. One of the rebound,

Marcus: 11:53

if anything.

Vic: 11:54

Right. One of the things that, um, this article does that I, I'm not ready to do is to take the, some of the programs 2025 Republican document and, Project that Trump will do those things he I think he might do some of those things, but I don't think it's going to be that one to one. I think there's been so much noise and things around that it's going to it's going to emerge. I think a little differently.

Marcus: 12:22

I agree. And I think I think that the, um, the swiftness of the win To me shows the strength of trump, right? And not necessarily the strength of the heritage foundation or any of these other groups, right? And so I don't believe he's beholden to any Plans or agreements or any of those kinds of things i'm not saying they're off the table But i'm saying he's sufficiently strong to do whatever it is. He wants to do, right? Yes, if he decides he wants to execute that plan, then that's fine So, um Um, but it's not clear to me that that's actually what he is going to do.

Vic: 13:02

Yeah, and, and I don't have, um, inside knowledge more than anyone else, but I have been reading a bunch about it. I think he is, he's learned a lot from 2016 and is really trying to. Build his team ahead of time in a much more, um, kind of buttoned up, uh, understand the, the, all the bureaucracy that you're going to have to work with. As opposed to 2016, it maybe just came in, not that he was unprepared, but it was a much more rushed, put something together. I mean,

Marcus: 13:37

At the end, based on how many people came and went through, through that, through, through that term, I mean, it was kind of the B team, right? It really wasn't put together that well. I think if you're looking in on the front end of, of this run and what this term is shaping up to be, It's a lot more like the a team, uh, you know, the people that he's got around him, just pure talent, proof of execution, um, and proof of ability to, to, to lead full, you know, full organizations on their own, multiple organizations in some cases, uh, it's, it's just stronger from a talent perspective. So, um,

Vic: 14:14

yeah, I think that's right. But he also has eight years or whatever, several, a lot of years where he now knows. people in these circles more. Yeah. So he, he knows who he trusts and who he wants to work with, with a much stronger conviction, I think, than previously.

Marcus: 14:30

Yeah. Yeah. So this, this article, um, assumes that Medicaid is, is going to get, Uh, you know, knock back a peg. That's not entirely clear to me. I don't see why Medicaid would not move in a very similar direction to Medicare from a Medicare Advantage view, why it would not just become more sort of market based and, you know, more, hey, let's, let's capitate and let's, let's bring in innovation and bring in new players. So I don't know. I mean,

Vic: 15:02

yeah. I mean, I think we're already seeing a trend. least in private markets for carving out particular disease states or types of population or geographies in Medicaid, accepting risks for a particular population and then having to deliver. Yeah. And I do not think it makes sense in any world to cut back Medicaid, which is, you know, for the poor and the children. I mean, I just don't think that's no politician is going to that's a hard thing to cut. I don't I don't see how that Now, reorganized, brought to more market based things, maybe fewer bureaucracies, fewer people in the bureaucracy, maybe try to save some money on how it's managed, any of those things, but I don't think they're going to really cut it. cut back on the spend on the benefits.

Marcus: 15:58

Yeah. Conversely, if you have a sweep, um, especially after the failure to do so in his first term, uh, the ACA could, could be really impacted. Yeah.

Vic: 16:11

Well, certainly the expansion side of the expansion states, I think, uh, many of the reasons that some states didn't expand is they're worried about the federal subsidy. ending at some point. Yeah, but I think that's, that's could happen.

Marcus: 16:28

I mean, I think also some of the penalties, right, that, that show up in the tax code as far as like the requirements to have coverage. I think those things could also be impacted because I, you know, I'm not, it's not entirely clear to me that those things are, um, The most celebrated aspects of the AC, right, you know, having a marketplace is one thing, having a being forced to purchase something on that marketplace, which then creates an incentive for the prices to be higher because it's a forced buyer.

Vic: 16:55

Yeah, I think that was a negotiated settlement with the payers. Like, if you're going to have to allow anyone to come on without any pre, you know, precondition exclusions, then everyone's got to have insurance all the time. Otherwise, I'll just wait until. Until something happens, and then I'll sign up then. Um, but yes, it could, it's all going to be on the table to be looked at, I think.

Marcus: 17:21

Yeah, I think, I think that in particular is going to be on the table. This article, I think, yeah, similar, uh, so we'll just put it in the show notes. Uh, CVS, holding back guidance as it outlines plan to write the ship at Aetna.

Vic: 17:33

Yeah, so they had earned their earnings today. And they, uh, beat earnings and it seemed fine, given all the trouble they've had, it was fine. But, but as it says, they, they declined to give any forward guidance. And then their MLR ratio of 95 rough. That's rough. Now I know David Joyner a little bit. I think when you first come in as CEO, the first earnings call, you want to just throw all the, all the garbage, anything you can find and blame the person that you took over from two weeks ago. That's right. And so my guess is that they put like all the things they could put in to make this earnings, you know,

Marcus: 18:18

Rough. I mean, especially if you compare it with a beat. Yeah,

Vic: 18:21

right.

Marcus: 18:21

If you can do those two things, that's a pretty, you know, But your

Vic: 18:26

mlr is 95

Marcus: 18:31

Yeah, that's crazy, all right, so I think I think for me the the big big big story um as it pertains to trump and health care is Robert F. Kennedy Jr. Um, I don't think there's any question that RFK Jr. is a, uh, meaningful contributor to the Trump win, uh, in terms of giving his, putting his entire influence that he had built largely with an independent sort of fed up with the two party system, um, base and bringing them over to the Republican vote. That was meaningful because he, you know, he wasn't going to win, but he was starting to claw away. Right. He was starting to claw away votes and a meaningful clip that made him a player.

Vic: 19:23

Yeah, no question. And he leveraged that into a role in the Trump administration. Right. But before we get to that, I think one of the things that in hindsight, I'm, I'm thinking that Trump really did differently this time is in power, really high profile surrogates like Robert Kennedy, like Elon Musk, like Joe Rogan. Yes.

Marcus: 19:45

Yes.

Vic: 19:45

And

Marcus: 19:46

Dana White.

Vic: 19:47

Yeah. That really paid off for him because people follow those, those folks and, um, and

Marcus: 19:53

a pretty different strategy than the Democrats. I mean, we're already starting to, you know, review the, the, the election and the campaigns, but different strategy from the Democrats who kind of went the celebrity route, which is not the same as like high. Powered, influential people and business people.

Vic: 20:09

Yeah, I mean, people love Taylor Swift or Beyonce. I mean, she had a whole, whole long list of them. You name them, right? But you don't, uh, think they are great about a particular deep part of, of policy. They're just not known for that. Right. And not that Joe Rogan is an expert at things, but people listen to his podcasts religiously and they, the people that listen really respect to Rogan's comments. And so he is an influencer around how to think about things in a way that an entertainer, I think it's just not, I mean, Rogan is certainly entertaining, but he, but he does it in a way that is kind of More information based, maybe I'm not sure

Marcus: 20:57

look, I mean, I, I think we're talking about celebrities. We're talking about these, these very, very influential, credible people like, you know, Elon Musk is credible. They know why it is credible. They, you know, Joe Rogan is credible, but I think also, you know, the all in guys, right? I mean, all in was very early to this whole, to this whole party. Um, but I, I think also. It's, uh, it's a true nail in the coffin for mainstream media. Mainstream media, I think, was in serious decline. CNN had sort of already fallen off a cliff, and MSNBC was, was maybe like the last standing bastion. But I think, I think this morning, MSNBC really, um, It's kind of like Dead Man Walking, you know, because how do you explain everything MSNBC tried to do throughout this campaign versus the power of a Joe Rogan, right? Versus the versus the power of podcasts versus the power of social media.

Vic: 21:57

Yes. Um, listening to Trump go on for an hour, right? No talking heads. Yeah. No three minute clips. Yeah. Right. And even if you don't like what he said in a 10 minute window, you got a much more in depth view of what he would do over the next few years. That's right. I think that's healthy for, for the democracy.

Marcus: 22:21

It's a bit, look, podcasts are a better format. Yes. You know, for media period. They're just a better format. I mean, all the way around. And so, this is something that, uh, Trump, and look, before Trump did it, RFK did it. RFK was the first one on all the different podcasts, you know, building his base via podcasts. Right. So anyway, the reason why I think he's so, uh, pivotal for us is he is the Trump influencer for healthcare. Yes, that's right. Right. He is the influencer. It's not clear, you know, he's, he's a, he's a lawyer and an activist and, and lobbyists and all those kinds of things. It's not clear that, um, he has the background and experience or even desire maybe to directly run. one of the agencies, but he's got very, very strong opinions. And, you know, I think arguably a very strong base of knowledge about the agencies as a collective, right? In particular, the FDA. Yeah,

Vic: 23:30

that's right. And I think that, um, I mean, in this 14 minute video that we'll post, he's pretty clear about what his motivations are, which is try to address chronic disease. Which I, I fully agree with, I mean, I'm not sure how to do that, but that's a good goal. Get our food to be more healthy, which is hard to argue with. I mean, absolutely. The case that in Europe, XYZ chemical is not allowed in McDonald's food and we have it here. Right. I think that's pretty common sense. Um, and then he's focused on, uh, really, I would say aligning incentives. at CDC, FDA, HHS, so that if there's science to be done, the scientist that is reviewing it is not getting paid by the company that is sponsoring the trial, which again, seems fairly straightforward. Um, when he goes off and talks about fluorine in the water and vaccines, and he, he will go and he does it in this talk. He has like pet projects that he wants to work on. Right, right. Um, and he's kind of similar to Trump in that way. He'll go off on a tangent, and I don't know if fluorine in the water is good or bad, but we've had it for a long time, and it hadn't seemed to be. That bad, but maybe it's bad, but getting the incentives aligned, getting, you know, sort of our standards, right. Addressing chronic disease in children. These are things that I think are everyone get

Marcus: 25:12

behind. I think you just brought up an interesting characteristic of many of the people who are around the entire

Vic: 25:18

orbit.

Marcus: 25:18

Yeah. That, which is, uh, competent, but all kind of with pet projects. Yeah.

Vic: 25:25

I mean, if you want to just stay on message and stay the hell out of Twitter. Or X, he'd be great. He's he's an engineer or engineering visionary. Um, but he has a pet project around media and that's how they all are. I think.

Marcus: 25:42

Yeah. Yeah. So, so anyway, um, you know, I had tipped to Emily and by the way, like I woke up this morning, she was, Emily was the first person who I slacked with and I said this to her and I just want to say it on the show, you know, I'm so grateful for the multi year dialogue. That we have had with her, we, you know, we've been doing this since even before the pandemic talking to her and I think it has given me so much important, important perspective, such that a day like today did not like left field me, you know what I mean? Like, yeah,

Vic: 26:21

you're not overwhelmed by all of the things that could happen because you're grounded in, in kind of how it works.

Marcus: 26:26

Yeah. And she's really good at spotting. Things like RFK and Trump and that RFK is the healthcare guy and Trump is likely to, you know, tap RFK way before any big articles come out about this, like she's, you know, this is why we have her on every quarter. This is why you and I talk to her every week, right? So I would pay attention to what Hedgeye says. So anyway,

Vic: 26:44

yeah, I mean, the thing I, I love about healthcare and is the same thing that I hate about healthcare, that it's highly regulated. And the. The regulatory bodies are very strong because human life is at stake. And so early on, you and I realized that, gosh, we need someone to help us with this, probably, probably 10 years ago, nine years ago when we started. And Emily's incredible at being able to take hundreds of pages of documents and tell you and I what it, what it means. Yeah.

Marcus: 27:12

Yeah.

Vic: 27:13

But she said to me early on, meaning like five months ago, if Trump wins, food is going to be a healthcare topic.

Marcus: 27:21

And that's that's right. Yeah, it's absolutely right. Yeah. So anyway, uh, there's going to be a lot to sort out because, you know, running an election, uh, winning an election is very different than governing, right? You know, then you get in there and you have to kind of figure out what you actually can get done within your term with the priorities. You got to clean up. You got to swap out teams, et cetera, et cetera, et cetera. So lots of lots of kind of work through there. Um, Um, but RFK is going to be a, a key figure to watch.

Vic: 27:49

And the executive order thing, you know, really probably, I mean, people had done it before, but Obama started really using it effectively and every president has used it in a significant way. I think they're planning like three to 400 executive orders in the first couple of days. I mean, so it's going to be. Now, that won't be until January, but there's a lot, um, Well, look, I, I mean,

Marcus: 28:15

I, I, I was told that, uh, you know, whenever you step into an executive office, if you don't have your first hundred days completely planned out, you're a year behind.

Vic: 28:26

Yeah, yeah.

Marcus: 28:27

So, uh, it, it, it wouldn't surprise me that they've got their agenda ready to go. to start executing on day one, right? I mean, that's it's not like it's his first rodeo, right?

Vic: 28:39

Right.

Marcus: 28:39

He's going back to the White House. So I would expect him to know what it is he wants to get done and what he can get done, right. And to go ahead and get it done.

Vic: 28:47

Yeah. And before we jump to this, uh, did you watch the covers last night at all? Just going back to the media topic for a second. So, uh, Rachel

Marcus: 28:55

and I had our date night and we specifically wanted to not be in front of the TV. So it's not a good day. Yeah. So we went to dinner to a place that had no TVs and we had a good conversation. And then we came home and I said, Hey, I want to just kind of turn it on. Um, I turned it on and, and I kind of went back and forth between MSNBC and Fox. I, I tried to actually watch the Amazon one, but it was, it was so like low rent. I mean, I was actually pretty disappointed

Vic: 29:24

on one. Well,

Marcus: 29:25

maybe when I turned it on, it just, it was like, uh, they couldn't get the camera angles right or whatever. And I was just kind of like, uh, look, I can't deal with this.

Vic: 29:31

Yeah. So that's what I wanted to bring up. I, for multiple elections, I've been flipping back and forth between right and left to try to get a coherent story. Yeah. And Amazon did a really good job bringing in true experts from each side, like someone that had worked in the Trump campaign until July and someone that had worked in the. Harris campaign until like September. Okay. Okay, and then they had a historian and they had writers from you know Lots of places the set was the set a little

Marcus: 30:02

weird. That was wacky. That was

Vic: 30:04

strange wacky Um, I mean, come on, but the talent was Was good. I didn't have to flip around, which was really

Marcus: 30:12

helpful. You probably caught it at a good place. When I, when I turned it on, I thought the person who Brian Williams was interviewing was not that interesting. And then the set was wacky. And then he like, there was a moment where he couldn't figure out where the camera was or the camera, like, You know, I mean, he's the professional. He's been doing this for, you know, decades. That's some camera guy who like couldn't get the camera. That's because

Vic: 30:33

the set was so bizarre. It was. Yeah. So

Marcus: 30:36

with that, I was just like, okay, I, I can't sit through this. I'm just trying to get, get a feel for what's going on. So I went back and forth between MSNBC and Fox only really once. I mean, I, I turned on MSNBC to start, I could already tell by their mood where it was headed. Yeah, right. So then I, so then I went to Fox. Um, And, uh, you know, Fox had Harold Ford Jr. on, which was good, uh, and so, and, you know, Fox has actually kind of come a long way from the, the hardcore Tucker Carlson era. I mean, if, you know, if you're watching Hannity or Laura Ingraham, you know, you're going to get sort of the extreme stuff, but their main shows, they've actually moved, I think, more towards the center. They clearly have a right. You know, conservative bent. Yeah, but it was actually pretty, um, professional. I thought the way that they, they, they were, you know, representing everything. But, um, once I kind of could tell what was happening, I think I watched in total 15 minutes. Yeah. And then I went and did laundry and went to bed.

Vic: 31:41

Yeah.

Marcus: 31:42

I

Vic: 31:42

mean, I

Marcus: 31:42

was just like,

Vic: 31:43

well, it was just refreshing to have. I mean, I think Amazon very intentionally had it like 50 Uh, and then, of course, the, the results came in the way they came in. Sure. Like, James Carville, I think, couldn't stay on the set anymore, because he was just sad.

Marcus: 31:58

Yeah.

Vic: 31:58

And so, they lost some people over the night, but, uh, in the first hour, it was pretty good.

Marcus: 32:03

Yeah. That's interesting about, you know, James Carville, Just the, the democratic establishment, you know, um, but anyway, let's, let's cover this last story and then we can have, you know, sort of a more broad conversation. So Elevance says that the, the, the star rating snub cost them 375 million. I mean, that's a lot of money. Um, I, I just think this it's funny now, right? Like looking at this all in the context of this election, right? It feels like there was an overall. Agenda and even maybe more importantly than agenda, a posture from the regulatory agencies that just did not make any friends, you know what I mean? That did not make any friends. I mean, we, we, we talk about it off the show in terms of, you know, The SEC and Gary Gensler and, and, and the entire crypto industry. Mm-Hmm.. And, and look, the thing I think that, that people need to understand there is the crypto industry came together. They made the second largest pack behind the Make America Great Again pack, except for their pack was totally dedicated to Senate race. Right. And it's like, aha. Look at what happened. Right, right. They flipped Ohio. Yeah. Who do you think flipped Ohio? Yeah. The Crypto Pros flipped Ohio. Right. Like. Make no mistake, if they had the second largest pack, and it was entirely focused on the Senate, they flipped the Senate.

Vic: 33:44

Yeah, and obviously I'm biased because I own crypto, and I've been following it for a long time. My view though is that they really just want to keep it. clear regulation. No, well, this is

Marcus: 33:55

my point, right? The, the regular, if you, if you are tracking this, right. And I, and I don't believe that the everyday American is tracking this. Right. Okay.

Vic: 34:07

But, or a healthcare professional really isn't necessarily tracking

Marcus: 34:10

it. That's right. But when you look at the, the league of, You know, ultra rich and powerful people that flipped, that went from Democrat to Republican over the course of the last 18 months. When you look at that group, largely why did they do that?

Vic: 34:30

Either SEC or FTC was not, they weren't clear about what rules they were following. Like, I think, Most, most successful business people understand that there's regulations that need to be followed. When people get really mad and start donating to the other side to, to get particular people, the head of the SEC, the head of the FTC, fired, it's because they are not being honest. They're not saying like, here are the, I mean, the SEC needs to protect, you know, everyday Americans from, from things that aren't fair. Of course. But it doesn't need to just like be opaque about what is allowed and then say, we'll, we'll convict you if, if we decide to, but there's no clarity in what's allowed and what's not. Right. That, I think, uh, if a really wealthy person feels like a bureaucracy is, Not in their favor, but also just not being clear and picking winners kind of randomly or whatever, whoever they happen to like that day, that's when they get really mad. I

Marcus: 35:41

mean, we talked about it when it happened. The Bitcoin conference this year happened in Nashville. It was like a week or two weeks after the RNC. And it was basically the RNC part two. I mean, there were mag hats everywhere in town for the Bitcoin conference. This was a completely unforced error. There is no good policy reason. There's no good political alignment reason for the democratic party to be hostile towards Bitcoin and the RNC. Cryptocurrencies. Yeah, there's there's not there's not a good reason for it.

Vic: 36:20

The only reason is they don't understand it and they're scared But that's not a reason. That's not a reason just

Marcus: 36:25

learn like that's not a reason Yeah, and so the fact that that happened and like I don't think mainstream media covered it one time, right? I don't think I you know, I think the average person who's Behind the Democratic Party did not understand the severity of that self inflicted wound, right? And why am I bringing this up with the Elevand stuff? Because, you know what? I bet there's a whole The star rating's the same. Yeah, star ratings is the same. It's the same. It's like, there was no warning. You know what I mean? There was no warning. You guys

Vic: 37:00

just kind

Marcus: 37:00

of came over the top. And there's no clarity

Vic: 37:01

of how you get the stars yet, or what the repercussions are. And so they're suing somebody to try to recoup this money. They're going to win. And they're going to win. And the reason I think they're going to win is because other insurers have won already. Yeah, that's right.

Marcus: 37:16

They're going to win. So, I don't know. I mean, that's the last story we have because we wanted to have a short story. Show and really more talk about the changing winds. But gosh, I just can't get over the, um, the recklessness, the allowed recklessness. And this is really where I feel like the Biden administration, um, deserves a lot of blame, you know, they allowed particular. Senators to have too much influence over the regulatory apparatus and they created very powerful enemies, very powerful enemies. Um, and then they underestimated what those powerful enemies were going to do. You know, and I just feel like, gosh, did you, did you need to make an enemy out of Elon Musk? I mean, because he didn't just like come up with all this stuff out of nowhere. It's like, let's talk about the fact that you snubbed him when you were, when you were convening all the electric car manufacturers. It's like, what is that even about?

Vic: 38:29

He

Marcus: 38:29

created the whole industry. Yeah. Like, I don't care if you don't like him, but you didn't invite him to the convening. Right. It's

Vic: 38:36

like, I think that's a union thing. Yeah.

Marcus: 38:42

Yes. So Emily was bringing up the unions. Um, and boy, does it feel like that's another big loser here? Yes. Right. Because if the unions are going to be the dominant financier of the democratic party, that that's an anti progress, that's an anti progress paycheck, right? Yeah. And that an anti progress ain't flying anymore.

Vic: 39:13

Well, it was interesting to think of the Teamsters. for the first time ever, they didn't endorse a candidate for president. And I think it's because they, their membership is,

Marcus: 39:27

was Trump was Trump.

Vic: 39:29

And so it'll be interesting to see how the, how the unions evolve. I mean, there is a world where making products in the continental U S right here would be good for unions. As long as they are sort of collaborative with. management and it works. I mean, I, I want, I mean, there's a lot of nurses that, that are unionized. I want them to have a good work environment, fair hours, fair pay. I think probably all of our listeners want that, but it needs to be negotiated in a way that's collaborative and it's fine for them to organize and collectively bargain. As long as it doesn't become, like, not collaborative and more like of a hold up and try to take advantage.

Marcus: 40:21

Yeah, yeah. Alright, so, so Vic, this is episode 100. Yeah. Um, we probably should have had Notebook LM tell us at a high level what we've been talking about for the last, you know, 100 shows. It, it remembers better than I do. It does, it does. But, but, I mean, just thinking back, back thematically, How do you remember the, you know, the last 99 conversations we've, we've had, right? I mean, both with ourselves, but also with guests. I mean, you know, how, how do you recall it?

Vic: 40:53

Um, my recollection is that it kind of evolved pretty organically. I mean, like you and I wanted to be able to keep up with the new cycle and dig in Not fall behind and this was a good way to kind of hold ourselves accountable and and read all the news and then Come prepared to talk through it all and then as we started going we we created gosh We should separate this into okay. There is like a macro economy thing that Maybe like in the 10th show or the 12th show. We started having categories of economy, I'm not going to get in the right order, policy, payers, providers. Um, and then we added in AI and that kind of, um, what's it called? Like health about us thing, because there are more like, uh, lifestyle things. My recollection is it sort of evolved to meet what we were interested in. Um, and. I've found it be really helpful in the rest of my week. So like I do this and I'm reading my normal things every day that is sufficient that I, I can, I can talk with any investor that calls or maybe a portfolio company or a co investor. Right. I pretty much know what the big stories are. Whereas previously I was having to fake it more. Like I, I, I would know a little bit, but I wouldn't know the details or wouldn't know enough. And so. It's been really helpful from that point of view.

Marcus: 42:33

Yeah, I, I, I don't need to say anything more than you did because I've, I've had the same, the same experience. I think in terms of where we focus, you know, we've, we've organized a show around, we always start with the markets, right? And I think generally speaking, what we've been talking about there, the Fed, we talked a lot about the Fed. We've, we've started to wind that down as inflation has become less of an issue. And also the fed fund rate starting to come back down. So that that's starting to fade into the background a little bit, but gosh, it feels like for 75 of the 90 something episodes, it was like fed, fed, fed, fed, fed. Right. So I think it's interesting that that is now starting to sunset and we're moving beyond that. Um, you know, we talked quite a bit about. Corporate corporate real estate.

Vic: 43:15

Yeah.

Marcus: 43:16

And I think that's not all worked through or worked out yet. And something we're going to have to watch for in 2025. I did note that on the Wall Street Journal winners and losers thing that real estate was right under tariffs as a loser. So, you know, I think there's still implications there around that asset class.

Vic: 43:34

Yeah. Even though the Fed is cutting the Fed funds rate, the bond market, we talked about this last week, the bond market is still is rising. Yeah,

Marcus: 43:43

exactly. Fixed income is still performing. So that's, that's a, that's an offset. So I, so I think that's, that's a, that's a theme I expect we will continue to cover over the next hundred episodes. I think corporate real estate is, we haven't, Figured it all out. Yeah.

Vic: 43:57

Yeah, hopefully we'll cover in a way that it's resolving and not a crisis, but we'll see

Marcus: 44:02

well but I mean the the macro level trends around it, right whether it's inability to finance a previous valuations or Remote work or Or those who are calling for people to go back into the office, but at the same time are shedding and constantly laying off people, so they're, they're shrinking their footprint or headquarters moving all over the country from place to place. So it's so technology,

Vic: 44:29

AI and machine learning, you don't need as many people. That's right.

Marcus: 44:33

That's right. So all of these things, I think, make that asset class to me still in flux. I think, for example, I think corporate real estate in Nashville is going to be fine.

Vic: 44:42

Yeah. Overall, overall, right. Because we have enough inbound movement.

Marcus: 44:47

Nashville, Austin, Texas, right. You know, there are markets where I think it's going to be fine, but there are some questionable markets out there where,

Vic: 44:55

and there's a lot of buildings with a decent amount of debt in those Yeah.

Marcus: 45:00

underlie that mostly regional, but nonetheless, banks, right? So I think that's something we'll continue to, to focus on. I think the K shaped economy is another big thing that we covered and, and that's going to be front and center. You know, the, you know, the, the interesting thing about a sweep is congratulations. Now the entire problem is yours, right? So, so we, we will, You know, if in fact it is a sweep, uh, the entire economy will be in the hands of the Republican party. And it will be interesting how many of the policies actually make their way to Main Street in a beneficial way. I mean, I think for you and I, my gut tells me Uh, the Trump administration and a Republican win for matters of, uh, increasing capital flows and, you know, easing fears about taxes on capital gains. I think for all, for our industry, my view is it's likely going to be good. Yeah. I think, I think, I think getting the FTC and the DOJ out of, you know, the business of black mergers left and right. I think for all of those reasons, It helps our industry. But again, we are, you know, at least in the top 2 percent of the American public by even being in the venture capital game. Right. So when we're talking about the other 98, that, that will remain to be seen. That will remain to be seen. Yeah.

Vic: 46:25

I mean, I guess, um, so my wife was frustrated about the election. I don't think she'd be upset with me saying that. I think a lot of women were because of the abortion issue, which I don't think is. I don't think there'll be a nationwide anything. No, no, it's breaking

Marcus: 46:44

down to the states. I mean, that, that's, that's the

Vic: 46:46

fear that my wife and others have. I don't think that's real, but, but fear is just a, is not a rational emotion. We were talking about this last night, cause it's clear Trump was going to win. And what I said to her, I think makes me, reminds me with the Keshav economy. There were, you know, something like 70 million people that are so frustrated with whatever they're seeing out there with the status quo that they wanted, they wanted to change. And you're right, now Trump is going to have the opportunity to make a difference for those people. And it's difficult to get the, the money, the jobs, the benefits to them effectively, quickly, so that we only have two years before the midterm elections. And so the question is, what can he do quickly enough to benefit that lower part of the K? Um, I think the upper part of the K where you and I are, you know, our assets and venture funds and M& A activity, you know, I, I think it always kind of goes through the upper part of the K and then filters down, um, but there's a lot of people that are really frustrated with the American dream maybe isn't really that realistic anymore. And one of the things that I really like about this show that as you were talking about the and real estate, um, a lot of these topics are kind of intertwined in a way that they're, they all kind of interrelate in different ways. And there's puts and takes and, and, um, it's really helpful to be able to, you know, just kind of process it in real time every week because there's a lot of nuance there.

Marcus: 48:35

Yeah. Yeah. And, and, and you're, you're, you're, we're, we are fed new information every week. A new story comes out. Right. Um, and we have to try to fit it into our scaffolding or break our scaffolding apart because it, we try to fit it in and it goes, Nope, that doesn't fit. Right. So we've got to tear it all down and let's try to rebuild it again. Right. Let's try to get a framework for how we understand the world to be. One other thing inside of the markets that we, that we, or the economy is we talked about unions and labor and strikes. There was a lot of strikes, a lot of strikes over the course of, of the 9, 900 episodes. I mean, even today we didn't talk about it, but Boeing strike.

Vic: 49:12

Yeah. Boeing strike settled today. It was resolved. Yeah. Right.

Marcus: 49:15

Right. Right. So, um, I think both from a union political perspective and also from a, uh, striking ai labor, wages overall economy. Mm-Hmm. inflation perspective. I expect that to continue to be a story. Uh, I, I, I think,

Vic: 49:38

yeah, I mean, it, it's a, um, it's a cultural shift, right? The, the, I mean, to me it comes down to inflation and deficits like we have. systematically high inflation. Now it's not, I don't think it's going to be 79 percent anytime soon, but I also don't think we're likely to see 2%. Right. We're going to be in that like 2 to 5%. Um, and that is really hard on day to day folks that need to get a paycheck and then buy their food, pay their rent, get gas for their car, and they don't have that much left over at the end. There's a lot of people living paycheck to paycheck and inflation just eats into what they can buy. And with the way that the government spends money and goes into deficits, it's difficult to stop that. Because you, you're creating, More M2 money all the time. And I don't see Trump really solving that. Um, it'd be great if, if he cuts government spending massively. I just don't think many politicians can do that.

Marcus: 50:49

I don't anticipate in the next four years, the government spending gets cut massively.

Vic: 50:53

Right. So we're going to have high inflation

Marcus: 50:55

and

Vic: 50:56

that's going to be a challenge. Now, maybe we can,

Marcus: 50:59

plus we're going to have the results of tariffs. Yes. Right. Which is going to be another weird form of inflation. Yes. It's going to be segmented. Right. But

Vic: 51:09

yeah. And so the hope is that we grow faster than inflation and we kind of grow our way out of it. That maybe is possible. That's

Marcus: 51:19

not a

Vic: 51:19

terrible theory. That's the recipe that would work. Yeah. That's not a terrible theory. Right. And it, it just has to be a lot of growth. I mean, we've got to grow it, you know, the economy needs to grow at 6 percent if inflation is 3%. Yeah. Yeah. And so. That'd be great. And either way, um, I think investing in healthcare innovations in the U. S., there's so much change that's going to happen and it's, it's going to be a fun next couple of years to be sort of in the middle of it and investing in new companies that are, you know, riding these waves.

Marcus: 51:58

Uh, so to me, tell me if I'm missing anything, but I feel like that really kind of, you know, we talk GDP and jolts and you know, the kind of the, the measurements that come out, but to me, those were the main themes. That we would talk about on a regular basis. Yeah, and then the whole AI topic. Well, no, no, no, I'm just talking about in the economy. Just the economy, yeah, yeah, yeah. Yeah,

Vic: 52:17

yeah, okay, yes, yes.

Marcus: 52:18

Those are the big themes for the economy. Okay, so let's go to policy. So I feel like in policy, we talked FTC. Yeah. A lot. Um, I expect major changes there. Yeah. Uh, I feel like we talked CMS largely around, uh, physician fees, Medicare Advantage, really those, those two things, right? Physician fees and Medicare. Yeah,

Vic: 52:42

I think CMS is, CMS breaking, uh, sort of the connection with FDA approval. Oh,

Marcus: 52:47

that one too. Yes. Especially around digital health. Yes. Is what's really the big topic there. Yes. But Alzheimer's and, and, I mean, just generally speaking, misalignment. Yes. Absolutely. Absolutely. Between the two age, between those two agencies. Right. Was a, was a big thing. And then, and then I guess also you could talk about, I mean, this, this kind of came from on high, but you could also talk about the prescription drug, um, negotiations.

Vic: 53:10

Yeah.

Marcus: 53:10

Right.

Vic: 53:10

Yeah. That definitely had a, it was definitely a policy that had a big effect.

Marcus: 53:14

Yeah. Yeah. So. Those, those were some big things. Um, I think, gosh, I mean, what, what, those, those feel like kind of the big things we talked about. I mean, the FTC thing was such a big, massive theme, constantly mergers being blocked, constantly mergers being blocked, especially for health systems, you know, mergers being blocked left and right. You know, private equity, a lens on private equity, https: otter. ai You know, you want to talk about an enemy that you didn't necessarily need to make? Right. I mean, you know, I, I think a lot of checks came from big private equity. Yeah. CEOs and, and, and managing directors into the Trump campaign. And so I expect private equity to be in favor with the regulatory bodies and, you know, merge away, buy away, roll up away. Right. Um, what, what, what else in policy do you remember?

Vic: 54:11

Um, I think those are the, the. Those are the big things. I mean, there was something about, um, you know, getting rural. Getting care in rural markets to be functional, getting enough reimbursement. Yeah. But it's, it's not a policy that has really been answered. There's lots of problems out there.

Marcus: 54:34

Yeah. Yeah. But, but Nashville's got some people who've been working on it. Brad Smith, maybe most, most prominently. And, uh, You know, that's one of the things that's interesting people who have relationships with the Trump. I was gonna say there's a

Vic: 54:45

bunch of people in town that we know that already are connected in that, that I think would be great that know a lot about health care. Robert Kennedy is wonderful, but Brad Smith knows a lot more actually works. Yeah,

Marcus: 54:59

a

Vic: 54:59

lot more.

Marcus: 54:59

Um, so I think that kind of covers policy on the, on the health system side. Uh, I think the successful. Sort of launch of Ryzentail. Yes. That's exactly

Vic: 55:11

what I was gonna say. Yeah.

Marcus: 55:12

Yeah to me that that to me is the big story And in health systems and where that's gonna go like,

Vic: 55:17

yeah I mean, it's it's the I think we started the show with this theme that the payvider model. Yes Yes was the model to look at for the future. Yes And Ryzen sort of has then emerged as the, the biggest, very well run, and they're about to be a nationwide player that, I mean, of course, They already have both coasts. Uh, so that, that is probably,

Marcus: 55:44

well, I, I think the important thing about rising was it was taking best of breed nonprofits, like, you know, great brands, Kaiser and Geisinger, right? Okay. These are two top tier brands from different coasts. Yeah. Um, and. And saying, we're going to build this best of breed brand nonprofit national, not super regional, you literally went coast to coast and now you're, you're national at that point, um, pay Vita, right. And, and I think that is, that was a, an innovation to decide you wanted to go do that.

Vic: 56:21

Yeah. And there was no national pay Vita before that. Yeah. I mean, there's very large nonprofit systems. But I don't think Ascension, Common Spirit have any significant payer sides. No,

Marcus: 56:35

no. There are obviously pay riders on the payer side, but like from the health system side, no. No, everything is a regional for the most part. Um, so yeah, I think that was a big one. I mean the labor

Vic: 56:48

issues. We're really a big issue when we started started and then they got

Marcus: 56:55

turned around. Yeah, they got turned around. I mean, uh, huge, huge, uh, holes were dug out of by Ascension common spirit. Um, kind of across the board, you know, I mean, I mean,

Vic: 57:09

even HCA Lifepoint and all, they all had, well, they

Marcus: 57:12

weren't really digging out of holes. They were just tuning up performance, right? I mean, from

Vic: 57:16

the labor, like the pay rates, and being able to attract nurses, and not have to have travelers, and The model doesn't work if you can't get nurses in the building. Yeah.

Marcus: 57:25

I mean, all the post pandemic haze that the systems had to go through, they came out on the other side of it, you know, and they're, they're, they're pretty strong. Um, you know, look, uh, Stewart Health. Yeah. Obviously a big story on the, on the health system side of things.

Vic: 57:43

Yeah. That's, that's an interesting story because I agree with you. Picking a fight with private equity was an unforced error. Well, broadly. Broadly. Broadly. And. I think that example, I think it was legal, but, but it was, it was not that ethical. It was a hard, hard set of transactions over several year period of time.

Marcus: 58:08

Well, and also I think at this point, clearly the CEO. It's lacking some scruples. I mean,

Vic: 58:17

oh,

Marcus: 58:17

yeah, you know, I mean,

Vic: 58:19

very unethical. Yeah, I I'm not sure it was illegal, but not ethical. No. Yeah,

Marcus: 58:24

yeah, really pretty problematic. Um, okay. I think on the payer side, Medicare Advantage to me feels like the Biggest story of the last 100 episodes. Um, I think the payers were just kind of riding high and doing great. And then all of a sudden the star ratings thing came and they all sort of had to deal with it. And then maybe secondarily the Medicaid redeterminations. That's been more of a recent thing as, um, you know, those, those roles have been dropping over the last three or four months here. Um, but those feel like the top two stories there. And also, Maybe just a recognition. And this goes back to your payvider point that, um, the pure hospital business, unless it is like for profit and optimized and great markets, right. With unfair advantages or the pure health insurance business is challenged. Yes. You really, in most cases, excluding HCA and, you know, tenant, uh, And they have

Vic: 59:30

very carefully curated their, their network of hospitals. And

Marcus: 59:35

they have

Vic: 59:35

significant

Marcus: 59:36

scale, you have to have real scale to be able to make it work. But in most cases, I think Ascension does a pretty good job. Yeah, Ascension's got a lot of scale. Yeah, right. Um, but, but in most cases, the payvider model really does appear to be the model of the future. And, and I think that was one thing we, you know, we saw. Anthem turn into Elevance over the course of these last 99 episodes. Right. I mean, we watched that transformation happen. We've watched Carillon get built up over the course of the last year and a half.

Vic: 1:00:02

Yeah. So, um, Anthem to Elevance really did an excellent job taking the United Optimum kind of playbook and running it fast, very fast, but with great execution. And Cygna and Evernorth. They had like the concept but they just haven't really been able to execute.

Marcus: 1:00:24

Yeah

Vic: 1:00:25

um, so then the other thing on the payer side is the retail, uh, like the CVS, Walgreens, all those aspects have been very negative. It's just been an anchor. It's been beat up for the

Marcus: 1:00:41

entire time we've been doing this show. Drugstores, beat up the whole time.

Vic: 1:00:45

It doesn't, I mean urgent care can work if it's a feeder into a health system that can monetize the more, the higher acuity patients. That's right. When you're running an urgent care minute clinic kind of thing in a retail setting, you don't have that referral. That doesn't make sense, and yet, CVS, Walgreens, Amazon, Walmart, they all have done various interactions of them, but none of them have worked.

Marcus: 1:01:14

Yeah, uh, we watched basically the implosion of physician staffing. Yes. Yeah. Full on implosions there.

Vic: 1:01:24

Yeah.

Marcus: 1:01:24

Right? I

Vic: 1:01:25

mean, companies went bankrupt. Yeah. Yeah. Yeah. Yeah, the no surprises. I think it was well intentioned and probably good overall, but it, but it had that effect on it, it, it, it, it, especially emergency room.

Marcus: 1:01:40

Yeah, it attacked an already weakening, um, it attacked an already weakening segment of the market that always had weak credit ratings and that's a bad combination. You know, that business model was always kind of on the brink in a way. I don't think we fully understood. And no surprises really blew it away. Right. Um, so yeah, that, that was, that was a big one.

Vic: 1:02:06

Uh, and then I, I think there's been a lot of consolidation in payer markets. Like, um, just, you need to have scale and then you really probably need to have their version of payviders having Optum or, or, you know, Services data as a as a unregulated source of both data and insight, but also margin.

Marcus: 1:02:27

Yeah, yeah. I mean, I think I think you can operate inside of a market. So, like, I think about, like, guide well, Florida blue, right? You know, it's like there. Strong payer in that market with a bunch of other assets that sort of all work together. They don't need to necessarily be, you know, three, four, five states kind of all pulled together. It's, it's operating pretty well.

Vic: 1:02:48

Yeah. The blues have the association where they can, yeah, they can get. You know, the contract power across the country if needed.

Marcus: 1:02:57

Yeah, that's right. Yeah, that's right. Uh, okay. I think that kind of covers all that. VC markets. We talked about VC markets. Yeah,

Vic: 1:03:04

that's been wild during the show. I mean, it was like to the moon and then it cratered and now we're sort of crawling. Crawling back. Crawling back. Yeah.

Marcus: 1:03:12

Yeah. Um, today I think the deals mostly look like a barbell of mega deals and a bunch of seed deals happening. Right. You know, uh, the a and B deals largely. Kind of coming from the same names. I think that that's, that's been, I don't know how I really square that trend, but every week when we would sort of say, okay, here's a 30 million deal, for example, it's like the same player. Yeah, that's right. I mean, maybe 10 different firms that are all co investing together. Uh, so that, that part feels a little concerning to me.

Vic: 1:03:43

Yeah. The, the, the venture model, I think, I think maybe a can work, but BC growth, Without the IPO markets like fully on, I don't know how it really works.

Marcus: 1:03:59

Well, I mean, okay, now let, now let's fast forward to the next hundred episodes. Like what do you anticipate in a Trump administration in terms of IPO markets and M& A? I mean, I expect them to be back on. Yeah,

Vic: 1:04:13

I think it's going to be risk on. I expect

Marcus: 1:04:15

them to be risk on. Yeah. Yeah,

Vic: 1:04:17

and health care is, um, really interesting because Trump is going to be very, um, aggressive with tariffs. It's going to cause all kinds of chaos in supply chains, and health care is fairly protected in that. Now, there may be some pharmaceutical aspects that we work through, but, but of the 4 trillion, a lot of it is U. S. US buyers giving them, you know, buying something from a US based group. I think the markets are going to be risk on IPOs. I mean, there's several healthcare IPOs kind of gearing up for Q1 with the hope of a, of a Trump win. And I don't have an interest in any of them, but I want them to do well so that the whole for the whole market for the benefit

Marcus: 1:05:06

of the whole market. Right. Um, yeah. Well, you know, fingers crossed that that we do go risk on. That would be great. I mean, look, we're sitting on over 160 companies at this point. Right. I mean, and, and. They're, they're all working really hard, but when capital is not flowing, I mean, you know, it's hard to make step changes, right? I mean, so you, you kind of have to incrementally grow based on performance and EBITDA and things of that nature. And, you know, that's just, it's just a slow way to go for an early stage company.

Vic: 1:05:33

And in our portfolio is similar to a hundred other VCs. We have better quality maybe, but, but there's a lot of assets that, um, I mean, we have some that, that are net income positive and should be sold. They have no business remaining a small, that's right. 40 million, moderately profitable company. They need to, it's not really a company, it's a product. Um, and the venture industry needs to sort of cash that out and then recycle the funds to LPs and then they'll invest in new funds and it all works. It, um, I don't know, COVID kind of. You know, made everything a little bit crazy for probably five years. Yeah. So hopefully we're on the other side of that. Yeah.

Marcus: 1:06:21

Uh, and then I guess really AI is, is, is the last big theme and, you know, it's interesting, right? I mean, How much really happened in AI over the course of 99 100 episodes? I mean models Got vastly better, but because usage is so Unevenly distributed. It's hard to really Measure the impact of the models getting so much better. Yeah, you know version of a version if that makes sense Yeah, I like how do we feel that in the economy, right? I mean, I don't I don't know that we have yet.

Vic: 1:07:04

I, I'm very interested in sort of trying out things and keeping my fingers in it. And over a hundred episodes, you know, Chat GPT, uh, three was incredible. And maybe like two Christmases ago, um, I was playing with it and, and it was really fun. Magic, like you put in something and it gave you a story or whatever, a joke and know today to know how it works. Right. But then as we've evolved has been, I don't know, maybe a trillion dollars invested or a lot of money invested. Hundreds of billions of dollars, and it's incrementally better. The interface to like plug it in and have it do work that now I don't have to do. That's not really here yet. No, it's a but

Marcus: 1:08:04

doesn't it feel like 2025? It will be like it feels to me like. Throughout 2024, I saw AI get baked in, maybe in not awesome ways, but baked into every piece of software we use at work. That's right. Everyone HubSpot, Asana,

Vic: 1:08:22

all the SaaS tools, everything in G Suite.

Marcus: 1:08:25

Right. Right. Um, it's now AI enabled now, how often do we use it? Not that often, you know, but, but it's in there. Right. And, and, and we know people who are at these companies trying to figure out how to make it all work. Um, and I think next year we'll start to see it actually be. Um, more seamlessly integrated into workflow as they've, they've done the, the market and user research and figured out, man, right here, stick the AI right in this bit of the workflow. And it is going to have like a three X, you know, um, efficiency rating or something like that. Right.

Vic: 1:09:06

Yeah. I mean, I think, um, It's very similar to me to the, to the internet in 93, 94, 95 there, there were like very nichey use cases where it was powerful, but only for this one like particular thing that most people didn't care about. Right. If you were doing that. So like notebook LM is really good. If you have. 10 to 40 sources that you want to have a body of knowledge and interact with for a period of time, but it doesn't really export to any kind of database. It's not, it's not, uh, doesn't go anywhere, but for that use case, it's really good. And I think we're going to start to see more and more little niche use cases in 2025. Whether we get the first like big breakout use case, I don't know. I mean, people have been talking about agents for 18 months.

Marcus: 1:10:10

Well, okay, but I mean, they've really been talking about it for like the last four months, right? You know, that's the point of us watching this stuff. Like, yeah, there's

Vic: 1:10:18

hype. There was hype before that, but it wasn't, it wasn't, it wasn't

Marcus: 1:10:21

even remote. It was, it was, it was actually conceptual. Yeah. 16 months ago. It was like, Hey, here's this idea that we have right before they had multimodal. It was the first,

Vic: 1:10:30

uh, it was a coding one that really was, uh, Devin, Devin, that was probably eight months ago. Yeah.

Marcus: 1:10:37

Yeah.

Vic: 1:10:37

Um, and it, It's not widely available now, but, but I guess, um, so yeah, I think we're likely to have the first really breakout use case where, I don't know if it's a insurance, like a healthcare insurance, uh, medical director or a physician, you know, that now doesn't have to spend five hours a week coding or a VC making sort of investment decisions. Some use case where you can say, okay, I'm I now have this tool that allows me to do A lot more or more high value work,

Marcus: 1:11:24

you know, the other thing is back to the, uh, back to the idea that it's not evenly distributed. There is a difference between taking a legacy company and trying to AI enable it versus creating an AI native company from day one.

Vic: 1:11:41

Yes. Much easier

Marcus: 1:11:42

to create. And look, that's what we do. I mean, I mean, you want a perfect example of that? Our podcast producer, like you and I aren't feeling it. But there's a lot of AI going into the production of the production of this show.

Vic: 1:11:58

Yes.

Marcus: 1:11:59

Is there's a lot of AI

Vic: 1:12:00

going on. I mean, I don't fully know. I think Aaron probably has like 70 percent of the, of the work is. I think so. Is quasi automated quasi automated. Yes. He moves it to another step in the process and then it goes. Yes. I think that's right.

Marcus: 1:12:16

I think that's right. Right. And so. 2025 really, I think will be where we will see the first wave, not blips here and there, but the first wave of VC backed AI native AI first companies. Yes. You know, it's hard to like retrofit AI into a non AI native company. There's going to be some low cost of capital companies. I mean,

Vic: 1:12:45

I'm seeing it in my. My portfolio, which are not old companies, right, and, um, maybe an example, I don't want to use the name, but maybe four years old, they have spent 20 million dollars on their technology platform, and they use the money reasonably well for the time, for the time. And you could do it for a tenth of that now, maybe even less than that, just because you don't need, you don't need all those people. You don't need all that coding. And so, you know, what I refer to as technical debt, just like there's, there's technology that you have invested at the sunk cost and you, you need to have a pathway to get rid of it. But it's really hard, even for a venture backed company, that's four years old to do that for the, for the larger companies with all these employees. I mean, it's the innovators dilemma. They're not, they're not going to be suited for that, which is, it's good for our new investments. But there's a lot of, uh, mid stage private companies that, you know, the company's worth 30 million, but they raised 120 million. Yeah,

Marcus: 1:13:55

well, you know, what I think is going to happen to those companies if they want to survive, this kind of goes right back to the economy one, is they may have to just swap out divisions. Right. So one thing they might do is they might buy one of these AI native companies that fulfills an entire function in their business and lay off, you know, an equivalent of labor. One time, you know, CapEx replacement for, you know, perennial OPEX.

Vic: 1:14:26

Yeah. Our, our finance department. Is now replaced with this tool or, or, or, or you bought something, right? Yeah. I think that, that could happen in 2025. I think it might be 18 months, but it's fast. I think

Marcus: 1:14:45

it's going to happen. I mean, we already saw Klarna kind of, you know, lead on this with the whole customer service call center stuff. Right. I think it's going to become commonplace. We're already, we're already in a, in a market. And this is one of the most interesting things about this environment we're in politically. It goes back to the K shape economy. We're in this environment where, um, a lot of the layoffs are white collar. Yes. And that is actually quite palatable in a populist political environment, you know, like. Do you see people crying for all these tech workers that are getting laid off? I don't.

Vic: 1:15:25

No.

Marcus: 1:15:26

I don't. I don't see anybody crying about it. You know, and so that, that's a, that's a really interesting dynamic that we have at play that enables some of these ultra rich people, you know, whether they be the leaders of high tech company, like Elon Musk, or, you know, who just raised what 4 billion for XAI. Yeah. You're telling me that that, that AI is not going to be labor consuming. Like it's not going to. Eat up jobs. Oh yeah. It's going to destroy jobs. Of course. Yeah, of course it is. Right. There's no way it's not going to, but it's interesting that he can be positioned as the populist leader on one hand and on the other hand, well, he's raised a billion dollars for XAI, which is going to end up destroying jobs. Why? Well, because the jobs that are being destroyed are not really from the populist, uh, Group, right? I mean, this, this is the whole college educated, non college educated divide that we've got going on that, that showed up in this election.

Vic: 1:16:27

Yeah. That's interesting. Cause it's, uh, I mean, there's a lot of white collar, 100, 000 a year jobs won't exist in 12 months, 24 months. And so if you're 35 years old and you're an accountant or a software engineer, what, what do you do? I mean, I really don't know. It's not a retort. I mean, You have, you're 30, the reason I picked 35 is you've invested in your career for 15 years, but there's probably not, there's not mid level white collar jobs there. There might be senior jobs to help interpret things or use judgment, but then the rest of the jobs are going to be very limited. And we're going to need to find something for these people to do that gives them purpose, forget the money. I mean, you, you can give them basic income or whatever.

Marcus: 1:17:35

I mean, look, they are, they're, they're highly skilled people as a general statement. Right? So the question is really like, how do you repurpose or redirect? What should they do? Those skills, um, in this new, Economy and the other thing I was on the ring of five group text, you know, it's which has been pretty quiet today. I have to say, um, you know, in the, in the wake of the election, but, um, my little, you know, pithy comment was that I can feel the acceleration already. You know, we haven't talked about the whole acceleration movement. Do you remember when that was like kind of a whole, the whole EAC thing? It was, I don't know what this is. Okay. So behind it's largely on Twitter, but there's a whole movement for short, it's called EAC and it's a, I think it's a play off of the whole effective altruism. And it basically is saying we need to just accelerate for a minute there. Mark Andreessen was like all yak, yak, yak. That's why I didn't know if, if, um, but the, the idea here is when, when there was a lot of dooming going around the AI thing, this EAC thing was how. The pro AI people were sort of

Vic: 1:18:48

that's what their response

Marcus: 1:18:51

was. We need to accelerate as fast as possible because AI has the potential to, you know, um, solve world hunger, has the potential to solve our energy crisis, has the potential to create world peace

Vic: 1:19:03

and let's not operate from fear. Correct.

Marcus: 1:19:06

We need to accelerate as fast as possible. And yes, there are going to be some jobs lost, blah, blah, blah, blah, blah. And I, you know, if there's one visceral feeling that I have. Today it's I can feel the acceleration like I can feel it's not just risk on it's like speed on thing things are about to get really fast Vic, you know, like like if people thought they were fast before I think things are going to get so fast in 2025 and that's probably the scariest thing is you and I do this show. every week. It helps us, you know, I love the fact that we were able to just riff for, let's call it 45 minutes or whatever. And like, try to recall, but we have, but we have scaffolding. We have a narrative. We have a way that we've been able to make sense of all this stuff. That's a privilege, man. Most people cannot do that. Yeah. You know, most people don't have the time, the, the, the thought partner, um, and then you wake up incentives

Vic: 1:20:04

after a month. And the world's different and you don't have the tools to know, know where to start.

Marcus: 1:20:12

Yeah. And the people that just won want to accelerate it. Yes, that's, I think that's the thing. I, I know what they want to do and, um, they want to go really, really fast.

Vic: 1:20:25

Yeah. And. What was really surprising to me is the lower part of the K does too, or may, I don't know if they do or not, but they voted for

Marcus: 1:20:36

it. It feels to me like the lower part of the K wants change. Something different. Like,

Vic: 1:20:41

this is

Marcus: 1:20:41

not working.

Vic: 1:20:42

Just let's throw the table over and we'll figure out something else. Yeah,

Marcus: 1:20:46

it's a little more like that, but I don't know that

Vic: 1:20:49

they They might, uh, might be careful what you wish for, perhaps, but, but it's maybe, Better than just status quo, putting your head in the sand and acting like this stuff doesn't exist.

Marcus: 1:21:01

Yeah, we, yeah. We'll, we'll, we'll see. I mean, I, I'm, I'm not gonna play the, the role of, uh, I know better than the majority that just voted for the Yeah, yeah. So, so let's, let's see. You know, let's, let's, let's see where this all goes. But my, my feeling was certainly one of,

Vic: 1:21:19

I'm an, I'm vis feeling of

Marcus: 1:21:20

acceleration. Is it

Vic: 1:21:21

eac? Yeah.

Marcus: 1:21:22

eac. Yeah.

Vic: 1:21:23

I'm an EAC as opposed to a dor. Definitely. Yeah, I'm a venture capitalist. Like, I believe that we will figure it out. Not that there won't be problems, but that we'll figure it out.

Marcus: 1:21:33

Yeah. I, I think generally speaking, I am as well. I, I, I want to be thoughtful. There was all this kind of like, you know, Deac, like, you know, I don't know, decelerating acceleration, this or something like that, you know, whatever. But I, you know, I want to be thoughtful. I don't want to run into walls unnecessarily, but it, it does feel like we're about to, you know, be all gas, no brakes to me.

Vic: 1:21:56

I think that's. That's definitely what the new administration is going to

Marcus: 1:22:01

push for. That's what it feels like.

Vic: 1:22:02

Yeah.

Marcus: 1:22:02

Yeah. Um, man, anything else you want to say? I mean, we've been, we've been riffing for a while, but, uh, you know, look, thank you.

Vic: 1:22:08

I mean, I agree. I feel like lucky to have you as a thought partner and to be in, I mean, listen, there is no other position besides early stage. Investor in healthcare in the U. S. that I'd want to do. I mean, it's, it's the job I think is going to be a lot of fun for the next 10 years. Yeah. And acceleration is likely to happen. In healthcare, I think we need to be careful about protecting the patients and the caregivers, because for a long time, having an empathetic caregiver, even if my kid is sick, My plan is decided by AI. I still want a nurse or a doctor helping me think through it, listening to me, reflecting back that they understand my emotions. Maybe a robot could do that eventually, but for a long time, there's going to be people that are needed.

Marcus: 1:23:08

And

Vic: 1:23:09

so it's kind of a fun place where we can, we can accelerate and bring lots of change and improvements, but we're still going to have a lot of roles for people to, to help. I'm

Marcus: 1:23:22

looking forward to continuing to work through this all with you for another hundred episodes, at least. Um, and, uh, yeah, uh, a, a, a historic moment in, in, um, in modern time, you know, not just the, the, the, uh, second successful, uh, presidential election for Donald Trump, but, uh, true, truly a decisive, uh, victory, truly a decisive victory.

Vic: 1:23:48

Yeah, no question. And I think. It'll be really interesting to see what the Dems do in the next two years. My belief is we're going to be in populist world for a minute. There's going to be a bunch of young, talented liberal Democrats that want to change the party into something that can compete. I don't know what

Marcus: 1:24:16

shape that'll take, but, you know, it's kind of funny, right? I mean, I was a kid when it happened, but I look at this and I'm like, this must be what it felt like in Reagan when yes. You know what I mean?

Vic: 1:24:29

That's the exact thing I was thinking.

Marcus: 1:24:30

This must be what it felt like in Reagan Win Won Yeah.

Vic: 1:24:33

Reagan Democrats.

Marcus: 1:24:34

Yeah.

Vic: 1:24:34

Uh, you know,

Marcus: 1:24:36

which, which then started a a, a run.

Vic: 1:24:40

Yeah.

Marcus: 1:24:41

You know, a run.

Vic: 1:24:42

Yeah. And it. I think Clinton Clinton Clinton broke the run. But that

Marcus: 1:24:48

was, but that was 12 years. That was 12 years. Yeah.

Vic: 1:24:51

Yeah. I mean, J. D. Vance is young. He's the youngest vice

Marcus: 1:24:55

president

Vic: 1:24:55

ever.

Marcus: 1:24:55

Oh yeah. I mean, here's the thing. When you stray together three terms, the problem is you get all the. Baggage of anything bad that happened and you're not fully in control. So bad things are going to happen and demography is going to shift and blah, blah, blah. So, you know, no matter how good a job you do, I don't care which party you're in, eventually you're going to get fired for a prolonged period of time. And it feels to me like the Democrats have arrived at their moment of being fired for a prolonged period of time. That's, that's like, if I had to kind of try to objectively view it. You know, I'm trying to step back from this whole thing. Yeah, that's interesting.

Vic: 1:25:36

So, um, you couldn't respond, the Dems couldn't respond to Reagan until like a whole generation of people had left office and there was entirely new people there. Um, yeah, that's interesting. I don't know. I mean, I'd like there to be, I mean, two sides debating. Gets to a better answer. So I don't know. I mean, I'm a free markets guy, but I want the Dems to be strong and, and. Oh, no,

Marcus: 1:26:09

listen, I think. Anyone who values democracy and believes America has the, the best system in the world wants two strong parties. Yeah. E even if one party kind of slaps the other party around for a prolonged period of time Yeah. That causes, you know, you don't want the party go away. Yeah. You know, you want the party. Okay, go off. Go soul search. Yeah. Find out who you're gonna be. Get a whole new crop of leaders. Yeah. And back. That creates an

Vic: 1:26:37

opportunity for the governor of Arkansas to be president

Marcus: 1:26:40

cor. Correct. Yeah. Correct. And who, who now today, you know, back then was like this blue dog or whatever. Right. And today is the establishment. Right.

Vic: 1:26:50

And today

Marcus: 1:26:50

is the

Vic: 1:26:50

establishment. Right. It's kind of the innovators dilemma. Like you get, you get to be the incumbent and then all of a sudden you don't change so much anymore.

Marcus: 1:26:57

Yeah. So overall, um, I choose to be long America and long on the American people and, um, You know, believe we will, we will figure this out. And clearly I believe in innovation and entrepreneurship and, you know, do I think every single policy is going to be awesome over the course of, you know, the Trump administration personally? No, I don't. Um, but you know, I think, I think overall we, we will figure it out. And I think there are certainly things about a Trump administration, um, that It's going to be beneficial for America. I

Vic: 1:27:40

mean, the best thing for, for me personally is the clarity. Like just the fact that, oh gosh, whether you love the result or hate the result, there's a result 24 hours later. And now we can all plan for our life under the new administration. Having people who are predicting months of uncertainty.

Marcus: 1:28:03

Yeah.

Vic: 1:28:04

And I, I think it's a, it's great that we had this election and people got to vote. There's a lot, great turnout, great time. And, and the Democrats will figure out something else, but, but right now we're going to see how the Republicans do and I'm excited to check it out and there'll be a lot of healthcare to, To discuss and unpack and figure out.

Marcus: 1:28:27

Yeah. And, and, and for, for us, I mean, our job is to control that, which we can control. You know, I mean, I think that was the thing for me. I went to bed last night, like I live in Tennessee, Tennessee has. Place is electoral college. That's right for sure. I already know what that looks like. Yeah, and look, you know I gotta wake up check on my parents against my wife come in here build this company with you You know be a good fiduciary for our limited partners be a good board member for the companies where I'm serving on boards It's like I got work to do right work to do. It's just like yesterday today I got work to do, you know, and so you focus on that what you can control

Vic: 1:29:09

We'll talk about this every week another hundred episodes come in in the next couple years

Marcus: 1:29:13

Thanks for everything you did to make make it possible for us to get here. All right. See you next week